The SEC also requires preservation of documentation supporting audit or review, including memos, correspondence, electronic records, etc.
Observation by the audtor during the course of the audit. Your text points out that some items, such Auditing chapter 7 evidence checks, are assets only during that period when they have inherent value; prior to execution and after cashing, checks are classified as documents. SAS 67 AU describes two types of confirmations.
Qualifications of the individuals providing the information--reliability of the information is enhanced if the person providing it is qualified to do so. A positive confirmation asks the respondent to provide an answer in all circumstances, while a negative confirmation asks for a response only if the information is incorrect.
Supporting schedules Pay particular attention to the section in your text entitled Preparation of Audit Documentation. Which items should be selected from the population?
There are four types of decisions that an auditor must make: Timeliness--data that are timely for the purpose intended are considered more reliable. Physical examination is a way to verify that an asset exists, or to verify its condition, but not to determine whether the client owns the asset.
One type of evidence, by itself, is rarely sufficient to provide competence evidence. The author of your text draws the following conclusions from Table Sufficiency of evidence refers to the quantity of evidence, In part, sufficiency relates to the sample size that the auditor selects, but the individual items selected for the sample may have a bearing as well.
Documents that are external and have been prepared by qualified individuals such as attorneys or insurance brokers provide additional reliability.
The permanent files contain historical data pertinent to the current audit. The audit program for the current audit 2.
What sample size should be selected for the procedure? A strength of documentation is that it is prevalent and available at a low cost.
Physical examination and confirmation are the two most expensive types of evidence, while documentation and analytical procedures are only moderately costly. Relevance--to the audit objective that the auditor is testing; 2.
An example of an audit program appears in Table in your text. Additionally, there is software available that can be used to manage the audit documentation and network sharing of files among the audit team.
Working trial balance 4. Note the relationship among the audit procedure and the type of evidence gathered, as well as the sample size, items to select, and timing of the selection.View Test Prep - Chapter 7 Review Solutions from ACCT at Texas A&M University.
Chapter 7 Audit Evidence Review Questions In both a legal case and in an audit of financial statements,83%(6).
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Learn vocabulary, terms, and more with flashcards, games, and other study tools. Chapter 7Audit Evidence Review Questions In both a legal case and in an audit of financial statements, evidence /5(2).
© Prentice Hall Business Publishing, Auditing 13/e, Arens//Elder/Beasley 7 - 2 Learning Objective 1 Contrast audit evidence with evidence used by other professions.
EVIDENCE: any information used by the auditor to determine whether the. Quizzes › Business › Finance › Auditing › Auditing Chapter 7.
Auditing Chapter 7. 51 Questions | By Kosdaisy | Last updated: Feb 11, Physical examination is usually the least expensive type of audit evidence: Cost of obtaining evidence may be a factor in deciding whether to obtain that evidence Auditing Chapter 15 Quiz 2.Download