The third GAAS of field work requires that the auditor obtain sufficient competent evidential matter to afford a reasonable basis for an opinion regarding the financial statements under examination. In considering what constitutes sufficient competent evidential matter, a distinction should be made between underlying accounting data and all corroborating information available to the auditor.

Required:

a. Discuss the nature of evidential matter to be considered by the auditor in terms of the underlying accounting data, all corroborating information available to the auditor, and the methods by which the auditor tests or gathers competent evidential matter

b. State the presumptions that can be made about the validity of evidential matter with respect to (1) corroborating information and (2) underlying accounting data.