Certified Government Auditing Professional (CGAP) Practice Exam

Which statement about the necessity of supporting evidence in audits is correct?

1. Supporting evidence is optional if the auditor has strong prior experience.

2. All audit conclusions must be supported by adequate and appropriate evidence.

3. Personal beliefs about an entity's operations can be used as evidence.

4. Only some sections of the audit report require supporting evidence.

The correct answer is: All audit conclusions must be supported by adequate and appropriate evidence.

The statement that all audit conclusions must be supported by adequate and appropriate evidence is fundamentally correct because the integrity and credibility of an audit process rely heavily on the validation of findings through evidence. Auditors must gather sufficient, relevant evidence to support their evaluations and conclusions, ensuring that the audit's results are based on factual data rather than subjective opinions or assumptions. This requirement aligns with professional standards for auditing, which emphasize that conclusions should stand on a solid foundation of documented evidence. This ensures the reliability of the audit reports and maintains public trust in the auditing process. This principle also mandates that evidence must be both adequate, meaning enough to justify the conclusions, and appropriate, indicating that the evidence must be relevant and reliable in the context of the audit objectives. In contrast to this principle, personal beliefs about an entity's operations do not serve as valid evidence, illustrating the importance of objectivity in the audit process. Additionally, the idea that evidence could be optional based on an auditor's prior experience undermines the foundational requirement for objectivity and verification in auditing. Lastly, suggesting that only some sections of the audit report require supporting evidence implies that certain conclusions could be made without substantiation, which is inconsistent with established auditing standards that demand comprehensive evidence for all conclusions presented in an