Generally accepted standards for performing a financial statement audit require that auditors obtain sufficient appropriate evidence that provides a reasonable basis for forming an opinion on the fair presentation of the financial statements they are auditing. In considering what constitutes sufficient appropriate evidence, a distinction should be made between underlying accounting data and all corroborating information available to the auditor.

Required:

Compare and discuss how effectively each of the following sources of evidence provides support for the auditors opinion on the financial statements.

1. The relative appropriateness of evidence obtained from external and internal sources

2. The role of internal control with respect to internal evidence produced by an auditees data processing system

3. The relative persuasiveness of auditor observation and recalculation/reperformance evidence compared with the external, external-internal, and internal documentary evidence