Exam 5: Audit Evidence

There are six factors that affect the reliability of audit evidence.One factor is the independence of the provider (i.e. ,evidence obtained from a source outside the client company is more reliable than that obtained within).Identify and discuss the remaining five factors that affect the reliability of evidence.

The decision of how many items to test must be made by the auditor for each audit procedure.The sample size for any given procedure

With the use of electronic working papers,each team member should have a unique access identification code and a password to access the working papers.Once a working paper is completed,what type of access should the staff auditor who prepared the working paper file have?

For each of the following audit procedures,state and describe the type of audit evidence,state the audit assertion that it applies to,and describe the reliability of the evidence (with reasons). A)Watch staff scan products and enter cash received. B)Reconcile daily cash drawer receipts (cash,debit card sales,credit card sales)with daily sales for one week. C)Calculate daily gross profit and gross profit by product line. D)Account for a sequence of sales documents.

When the auditor examines the client's documents and records to support recorded transactions or amounts,it is commonly referred to as

To facilitate the working paper preparation process,defaults can be established to automatically insert client name,period covered,and preparer.This can best be done using

Although considerable evidence is obtained from the client through inquiry,it usually cannot be regarded as conclusive because

Which of the following is an example of subjective evidence?

When comparing the reliability of external versus internal documents,the external documents are generally considered

List the purposes and types of audit procedures used by auditors in all phases of the audit process.

The following are audit procedures in the sales and collection cycle. 1.Inspect a sample of shipping documents to determine if each has a sales invoice number included on it. 2.Discuss with the sales manager whether any sales allowances have been granted after the balance sheet date that may apply to the current period. 3.Add the columns on the aged trial balance and compare the total with the general ledger. 4.Observe whether the controller makes an independent comparison of the total in the general ledger with the trial balance of accounts receivable. 5.For the month of May,count the approximate number of shipping documents filed in the shipping department and compare the total with the number of sales invoices in the sales journal. 6.Compare the date on a sample of shipping documents throughout the year with related duplicate sales invoices and the accounts receivable master file. 7.Examine a sample of customer orders and see if each has a credit authorization. 8.Send letters directly to former customers whose accounts have been written off as uncollectible to determine if any have actually been paid. 9.Examine the master file of accounts receivable to see if each has an indication of "C" for a regular customer,"N" for interest-bearing receivables,and "R" for related parties. 10.Compare the date on a sample of shipping documents a few days before and after the balance sheet date with related sales journal transactions. Required: For each procedure,identify the type of evidence being used.For each procedure,identify either the transaction-related audit objective(s)being met or the balance-related audit objective(s)being met.