Final answer:
To obtain more reliable evidence, auditors must exercise professional skepticism, critically assess the evidence's reliability, and adjust audit procedures as necessary. This involves verifying sources, considering expert consensus, and reviewing information thoroughly to ensure its credibility and relevance. Option 2. is correct.
Step-by-step explanation:
In order to obtain more reliable evidence, auditors must exercise professional skepticism and be prepared to modify the planned audit procedures as needed. This approach is critical because it ensures that auditors do not simply accept evidence at face value or solely rely on the information generated internally by a company's management or its internal audit function. Instead, they should think critically and assess the reliability of the evidence provided, considering the source, potential bias, and whether it corroborates or contradicts other evidence. Implementing such practices as verifying the expertise of the source (e.g., considering if someone is an expert in the relevant field), examining if there is an expert consensus, and reviewing information to ensure it reflects such consensus are essential components of professional skepticism.
Gathering various forms of evidence and ensuring they can be tested using experiments, proven wrong, and provide measurable results are foundational to a rigorous and reliable audit process. Auditors need to be diligent in the verification process by analyzing assertions, evidence, and the language used in documentation, as well as continually checking whether internal information supports or contradicts other sources. Through this thorough and meticulous review process, auditors can make informed judgments and provide valuable insights into the financial statements they audit.