After the audit, the opinion that the auditor expresses are the result of exercise of judgement on facts, evidence and circumstances which he comes across in the course of audit. The judgement is formed on the following basis: –
- Identification of the assertions to be examined.
- Evaluation of the assertion as to relative importance.
- Collection of the information or evidence about the assertions to enable him to give an informed opinion.
- Evaluation of evidence as valid or invalid, pertinent or not pertinent, sufficient or insufficient.
- Formulation of judgement as to the fairness of the assertions under consideration.