What is Auditing Evidence? How External Auditors support their Opinion?

What is Auditing Evidence? How External Auditors support their Opinion?


Have you thought about how the auditors express their opinion about a company’s financial position? Auditor’s statement about the company is called Auditor’s opinion. That Auditor opinion needs the backing of evidence. Auditing firms in Dubai also follow the same principles of finding the audit evidence.

Without audit evidence, the external auditor’s opinion will hold no formal and legal authenticity. Just like in court, prosecutors need to present evidence. Similarly, the audit evidence is all the relevant information and sources to form an opinion. 

Why an Auditor in Dubai, Abu Dhabi, Sharjah, UAE needs Evidence?

Audit evidence is necessary about two important factors, to support the auditor’s opinion and back the company’s truthfulness on financial reporting in Dubai, UAE. In a common assertion, it is believed that auditing evidence is necessary only for the auditors. The audit evidence is equally important for the worthiness of the company’s integrity and stature.

What are the Requisites of Audit Evidence in Dubai, Abu Dhabi, Sharjah, UAE?

Like audit evidence needs to support the auditor’s opinion, audit evidence must be backed by some characteristics. It is impossible for auditors to examine each accounting transaction and evaluate each financial entry. Auditors in Dubai also use auditing techniques to gather reliable information to form audit evidence.

Auditing firms in Dubai follow the ISA 500 (International Standards on Auditing) code that defines the characteristics of audit evidence.

The ISA 500 guides auditors to gather audit evidence sufficiently and appropriately. Here the term sufficient refers to the quantity of the audit evidence and appropriateness means the quality.

Our expert auditors in Dubai broadly evaluate the audit evidence against these defined characteristics.

  • Sufficient: sufficiency relates to the quantity. Say, an auditor must consider a defined period’s financial statements (at least quarterly) to form an opinion. Financial statements must include all types of statements such as income statement, balance sheet, cash flow, and equity statements.
  • Appropriate:  It measures the quality of the information on which the opinion is formed. The quality is then further categorized into reliability and Relevance.
  • Reliability means information collected from independent and documented sources. For example, previously audited company records.
  • Relevance refers to the objective reference to the specific audit type. Say, a financial audit must relate to the company’s financial statements.

As there are several types of audits, the audit evidence changes by nature and scope too. Our Auditors in Dubai gather information from the company’s internal and external resources. The important part of collecting audit evidence is objectivity and impartiality.

What are Auditors’ Sources of Evidence in Dubai, Abu Dhabi, Sharjah, UAE?

All auditors in Dubai can and should utilize both internal and external company sources to gather audit evidence. These sources are defined as Test Controls and Substantial measures.

Testing the controls refers to the examination of internal controls and compliance procedures in place. Auditors in Dubai can use important tools to test the effectiveness internal controls and risk management systems. Control testing may include compliance inspections too, for example, checking the financial record-keeping in accordance with IFRS regulations.

The Substantial measure includes gathering evidence with the assertion. For example, to ascertain the information system controls in place. Financial record accuracy or occurrence of one-time large financial entries also includes ascertaining the evidence.

 What are the Methods of Collecting Audit Evidence in Dubai, Abu Dhabi, Sharjah, UAE?

Auditors in Dubai may use different methods and techniques to gather audit evidence. Formally speaking, the ISA 500 determines eight different techniques allowing auditors to gather audit evidence.

Let’s briefly see how auditing firms and individual auditors in Dubai use different techniques.

Inspection of Documents and Records:

It involves examining documented records such as company financial statements and accounting records. It also includes inspection of trade documents and records such as trade contracts, invoices, lease contracts, and so on. Auditors in Abu Dhabi, UAE may inspect documents gathered from internal and external resources.

Inspection of Tangible Assets:

It’s easy as you like, involving physical inspections of tangible assets such as machinery, plants, and vehicles. Stock or inventory inspections may also be carried out to physically gather the audit evidence. The purpose is to verify the tangible assets’ existence and correctness of value.

Observation Techniques:

Auditors in Dubai, UAE may use observation techniques to examine the effectiveness of compliance and procedures in place. It practically offers valuable information on how the internal controls in place are effectively yielding results.


Inquiry involves gathering audit evidence through direct questioning and formal negotiations with internal and external components of the company. All auditors in Dubai may involve in information gathering from company employees and outsiders such as suppliers and creditors.


Appropriately it is the inspection of intangibles of a company. For example, confirming the cash and cash equivalents held with banks. Confirming a company’s shareholding in investing categories or certificates of deposits. Invoice and payables balance confirmation also include under this technique.


Self-explanatory, as it involves the recalculation of information provided by the management. For example, recalculation of stocks or financial ratios such as EPS or Profit Margin Ratio, etc.


In some cases, the auditors in Dubai may ask the management or by themselves, reperform some compliance or internal control tasks. It provides useful and reliable information on tested internal controls. For example, auditors may reperform the physical cash vault controls or the IT controls to evaluate the effectiveness.

Analytical Methods:

These methods involve the use of analytical techniques such scanning or reviewing financial and non-financial information.

Data Sources used for Official Information:

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