ABSTRACT
This chapter conceptualizes about the nature and role of audit evidence and uses the insights derived to throw light on the nature of professional judgement and scepticism. It argues that these two important activities in the auditing context cannot be understood without adequate conceptualization of the nature of audit evidence. The evidence enables the auditor to give an opinion on the financial statements. In order to give the opinion the auditor must obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement. Much of the subsequent development of the theory of evidence was concerned with evidence in the sense of criterial evidence. The approach to scepticism, in so far as it involved reasoning that is not deductive, requires the exercise of judgement. Taking a sceptical approach in auditing involves the exercise of judgement. Scepticism can be exercised in the search for evidence of predictions as well.
