What is the key factor that determines the amount of audit evidence required?

The amount of audit evidence required is primarily determined by the risk of material misstatements. This risk assessment is crucial because it influences the nature, timing, and extent of audit procedures. When auditors identify a higher risk of material misstatements in financial statements, they must gather more substantial and varied evidence to support their opinion. This extra evidence aims to ensure that any potential misstatements can be thoroughly investigated and, if found, appropriately addressed.

Factors such as the age of the records, the size of the company, and the experience of the auditors can play supporting roles in the audit process. However, they do not directly dictate how much evidence is needed. For instance, while older records might present issues related to reliability or accessibility, they don't inherently require more evidence than newer records. Similarly, a larger company may have more complex transactions that could increase risk but doesn't automatically lead to more evidence being required without considering the specific identified risks. The experience of auditors can impact their ability to assess risks and interpret evidence but does not alter the foundational principle that risk of material misstatement guides the amount of evidence necessary for an audit.