Final answer:
Audit evidence is gathered by the auditor to reduce audit risk.
Step-by-step explanation:
Audit evidence is gathered by the auditor in order to reduce audit risk.
The purpose of gathering audit evidence is to obtain sufficient and appropriate evidence to support the auditor's opinion on the financial statements of a business. This evidence helps the auditor assess the risks and determine the reliability of the information presented in the financial statements.
Examples of audit evidence include legal documents, bank statements, invoices, and contracts. By reviewing these documents, the auditor can verify the accuracy and completeness of the financial records and ensure that the business's financial statements are free from material misstatements.