Using Big Data to Complement Audit Evidence for Data Relevance, Reliability, and Accuracy

There are various types of audit evidence that take on different roles, whether it be sufficient and appropriate evidence on its own, or more-so evidence that helps start to tell the story. For example, if an auditor got a check that directly showed that something was paid for, this would be sufficient evidence to prove that. However, if instead they got a COPY (not original documentation) of a letter from an employee saying that they paid, this may help start the search for the truth, but simply put it would not be enough evidence to obtain proof of that purchase. This directly shows the negative correlation between audit evidence and audit risk. The better, more reliable, and more concrete the audit evidence is, there is less likely to be audit risk involved with that specific type of evidence in the audit engagement (and vice versa).
Auditors editing estimates/subjective information can be tough, as these activities have high inherent risk because they involve management judgments or assumptions. One way to deal with these are through three main steps. First review and test management’s process of developing the estimates (such as performing procedures to test and evaluate the appropriateness and proper use of the methods). Secondly, independently develop an estimate of the amount to compare to management’s estimate. Then finally, obtain evidence on relevant events or transactions occurring up to the date of the audit report.
One type of substantive procedure is analytical procedures. Analytical procedures involve evaluations of financial statement information by a study of relationships among financial and nonfinancial data. Auditors can use these relationships to obtain evidence about the reasonableness of financial statement amounts.
Audit documentation is the principal record of auditing procedures applied, evidence obtained, and conclusions reached by the auditor in the engagement. That whole system is foundational to proving an auditor had a professional audit opinion.