How is relevance defined in an audit?

In the context of an audit, relevance is defined as the appropriateness of audit evidence to assertions made by management regarding the financial statements. This means that for evidence to be relevant, it must directly address the specific claims made in the financial statements. The auditor seeks to gather information that verifies the accuracy of these assertions, ensuring that the financial records reflect a true and fair view of the company's financial position and performance.

The importance of relevance in an audit stems from the need for auditors to ensure that their conclusions are based on evidence that effectively supports the management's assertions. Relevant evidence helps auditors assess the risk of material misstatement in the financial statements and allows them to form a sound opinion on the overall reliability of those statements.

While accuracy, completeness, and timeliness are also important concepts in auditing, they do not capture the specific notion of relevance as it pertains to the appropriateness of the evidence collected in relation to management assertions. Therefore, understanding relevance as the alignment of audit evidence with specific claims is critical for audit success.