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Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Verification Manual

14. Evidence



14.1 The Verification Agency shall obtain sufficient and appropriate evidence on which to base the Scores awarded to the Scorecard Elements. The Verification Agency shall consider the relationship between the cost of obtaining evidence and the usefulness of the information obtained. However,  the matter of difficulty or expense involved is not in itself a valid basis for omitting an evidence-gathering procedure for which there is no alternative.


14.2 Verification rarely involves the authentication of documentation, nor is a verification agency expected to be an expert in such authentication. However, the Verification Agency shall consider the reliability of the information to be used as evidence, for example, photocopies, facsimiles, filmed, digitized or other electronic documents, including consideration of controls over their preparation and maintenance where relevant.


14.3 Sufficient and appropriate evidence in a verification is reviewed and assessed as part of an interactive, systematic verification process involving:


14.3.1 Obtaining an understanding of the measured entity and other verification circumstances which including an understanding of internal controls in place;


14.3.2 Based on that understanding, assessing the risks that the measured entity information may be materially misstated;


14.3.3 Factoring in the assessed risks, including developing overall  responses,  and determining the nature, timing and extent of further procedures;


14.4 Evaluating the sufficiency and appropriateness of evidence.


14.4.1 Verification provides reasonable and not absolute assurance. Reducing assurance risk to zero is very rarely attainable or cost beneficial as a result of factors such as the following: The use of selective testing; The inherent limitations of internal controls; The fact that much of the evidence available to the Verification Agency is persuasive rather than conclusive; The use of judgment in gathering and evaluating evidence and forming conclusions based on that evidence; and In some cases, the characteristics of the measured entity.


14.4.2 When the Verification Agency becomes aware of a matter that leads the Verification Agency to question whether a material modification should be made to the measured entity's scorecard, the Verification Agency should pursue the matter by performing other procedures sufficient to determine the appropriate score to be awarded.