STANDARD ON INTERNAL AUDIT (SIA) 320
     INTERNAL AUDIT EVIDENCE
                                         Contents
                                                                                      Paragraph(s)
     Introduction ...................................................................................... 1
     Objectives ......................... .............................................................. 2
     Requirements .................................................................................... 3
     Explanatory Comments ...................................................................... 4
     Effective Date ................................................................................... 5


This Standard on Internal Audit (SIA) 320, "Internal Audit Evidence,"
issued by the Council of the Institute of Chartered Accountants of India
should be read in conjunction with the "Preface to the Standards on
Internal Audit," "Framework Governing Internal Audits" and "Basic
Principles of Internal Audit" issued by the Institute.





 Note: This Standard on Internal Audit (SIA) supersedes Standard on Internal Audit (SIA) 10,
Internal Audit Evidence , issued in January, 2009.
1.    Introduction
1.1   "Internal Audit Evidence" refers to all the information used by the
      Internal Auditor in arriving at the conclusions on which the auditor's
      opinion is based. It includes both information collected from underlying
      entity records and processes, as well as information from the
      performance of various audit activities and testing procedures.
1.2   Gathering appropriate and reliable audit evidence is a critical part of
      the internal audit process. This Standard explains certain key
      requirements in the process of collection, retention and subsequent
      review of internal audit evidence.
1.3   Scope: This Standard applies to all internal audit assignments.
      However, the manner in which the audit evidence is to be gathered
      from the performance of audit activities and testing procedures (e.g.,
      sampling techniques, data analytics, etc.) are not subject matter of
      this Standard and the Internal Auditor should refer to specific
      Standard on Internal Audit for that subject. Types of audit evidence
      and its possible sources are therefore not covered in this Standard.
2.    Objectives






2.1   The objectives of gathering appropriate and reliable audit evidence
      are to:
      (a)   confirm the nature, timing and sufficiency of the audit
            procedures undertaken as per the internal audit plan and terms
            of engagement;
      (b)   aid in the supervision and review of the internal audit work; and
      (c)   establish that the work performed is in conformance with the
            applicable pronouncements of the Institute of Chartered
            Accountants of India.
2.2   The overall objective of obtaining appropriate and reliable evidence is
      to allow the Internal Auditor to form an opinion on the outcome of the
      audit procedures completed. The evidence collected must stand on its
      own and not require any follow-up clarification or additional
      information to arrive at the same conclusion.
Standard on Internal Audit (SIA) 320

3.    Requirements
3.1   The Internal Auditor shall obtain sufficient and appropriate audit
      evidence which can form the basis of audit findings and allow reliable
      conclusions to be drawn from those findings. Evidence collected
      through various audit procedures shall be complementary and relevant
      to the objectives of the audit procedure conducted. (refer Para. 4.1).
3.2   The evidence shall be obtained from reliable sources with consistency
      between various evidences collected. (refer Para. 4.2).
3.3   All audit evidence collected shall be recorded and the internal audit
      function shall maintain a written process explaining the manner in
      which audit evidence is to be gathered, reviewed, documented and
      stored as per Standards of quality and in conformance to the
      Standards on Internal Audit. (refer Para. 4.3).
4.    Explanatory Comments
4.1   Nature of Evidence (refer Para. 3.1): Evidence is collected either
      from the underlying company's books, records, systems and
      processes or through the performance of audit activities and testing
      procedures. Documents supporting transactions (e.g., bills/invoices) or
      business arrangements (e.g., contracts/agreements) are evidences in
      the nature of the former. Evidences for the latter are collected by
      performing one or more of the following audit procedures, i.e.,
      checking, inspection, observation, inquiry, confirmation, computation,
      re-performance, analytical review and using the help of experts.
      Sufficiency and appropriateness are inter-related and apply           to
      evidence obtained. Sufficiency refers to the quantity or quantum      of
      evidence gathered while appropriateness relates to its quality        or
      relevance and reliability. Normally, the internal audit evidence      is
      persuasive on its own and a number of evidential matters              in
      aggregate, help make it conclusive in nature.
4.2   Reliability and Consistency of Evidence (refer Para. 3.2): The
      reliability of the audit evidence depends on its source - internal or
      external, its type and thoroughness and, may also depend on the
      timing of the audit procedures conducted. When the Internal Auditor
      has doubts over the reliability of information collected, or the internal
      audit evidence obtained from one source is inconsistent with that






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                                                      Internal Audit Evidence

      obtained from another, the Internal Auditor shall evaluate how the
      audit procedures need to be modified or expanded to resolve the
      doubt or conflict.
4.3   Evidence Collection and Recording Process (refer Para. 3.3): All
      audit evidence shall be recorded in such a manner that it can be
      reproduced (if in digital form) and reviewed independently of the
      Internal Auditor. It shall meet certain basic standards of quality to
      achieve internal audit objectives. Details of these quality standards,
      the manner in which audit evidence shall be gathered, reviewed for
      sufficiency and appropriateness, validated for authenticity and
      reliability and stored as part of internal audit documentation, shall be
      written in the form of an internal audit process (as part of the Internal
      Audit Manual).
4.4   Documentation: To confirm compliance of audit procedures with this
      SIA, the list of the documents required is as follows:
      (a)   Written policy and process on audit evidence, as part of the
            Internal Audit Manual.
      (b)   Details of the evidence collected, relevance to the audit
            findings and opinion being formed, cross referenced to the
            Internal Audit Program, where appropriate.
5.    Effective Date
5.1   This Standard is applicable for internal audits beginning on or after a
      date to be notified by the Council of the Institute.




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