ABSTRACT
This chapter examines the various types of evidence available to auditor in order to evaluate both the adequacy and effectiveness of the system of internal controls. Working papers evidence scope and depth of coverage of the examination, and supervisory and external auditors use working papers to help them assess and/or review the adequacy and quality of the work performed. Working paper review is part of the overall quality control process because it falls into category of supervision. The actual quantity of evidence required is largely determined by risk of material misstatement. The larger that risk, the greater the quantity of evidence the auditor would require to maintain an appropriate degree of confidence. The reliability of the evidence derived will depend, to a large extent, on the source of evidence as well as the circumstances under which it is derived. Auditors will generally give greater credence to evidence that is derived independently of the organization rather than evidence solely derived internally.
