Situations which may exert unusual pressure on entity, it is FRAUD RISK FACTOR, that which may lead to / become reason for fraud (i hope you asked this point in this context / reference)
Unusual pressures within the entity, for example,
industry is doing well but the company is not performing accordingly (pressure to manipulate financial statement and show performance in line with industry)
heavy dependence on a single line of product (pressure to manipulate financial statement and show good performance even if there is slow down in single product and there is no support of other product to maintain turnover and profit)
inadequate working capital, (pressure to manipulate financial statement to continue or get new funding for working capital)
entity needs raising share prices to support the market price in the wake of public offer, etc. (pressure to manipulate financial statement so that company gets good price in IPO and over subscription)
When we obtain evidence first time about certain matter it is called Initial Evidence
When we obtain more evidence about same matter it is called as Additional Evidence
If this additional evidence matches / confirms initial evidence it is called corroborative evidence
If this additional evidence is not confirming initial evidence it is called inconsistent evidence
Suppose auditor saw no change in old spare parts so it is indication of obsolete inventory.
1. he did inquiry with store head
2. attended physical verification of such items
3. took experts valuer report
now above 1 / 2 / 3 are additional evidence, if they support then it will be corroborative evidence.
so above conclusion is as per timing / sequence of obtaining evidence
below is as per reliability if evidence
Persuasive evidence (kaccha pakka) means suggestive evidence, which is not as good as conclusive evidence (pakka). In audit it is not always possible to get conclusive evidence. SAs says try to collect more and more persuasive evidence.
So Persuasive is good
More Persuasive is better
Conclusive is best.
So linking our example
1. he did inquiry with store head—– Persuasive is good
2. attended physical verification of such items—–More Persuasive is better
3. took experts valuer report—–Conclusive is best.
Employee Name / Age / Basic Salary / Qualification / Experience etc is source data which is given to actuary (expert) to compute provision for gratuity , pension etc
Details of cases pending against company can be source data, which can be used as external lawyers (expert) to predict provision for compensation