AUDIT EVIDENCE

Audit evidence
Audit evidence Obtained by carrying out audit tests or procedures.

Types of Test

Tests of Controls

Substantive Tests

Exam Dec 05

ISA 500 AUDIT EVIDENCE

Appropriate
Sufficient
Measure of Quantity Sufficient to support the audit opinion

Reliable Relevant
The evidence gathered must cover the FS assertions
Documentary better than oral Originals better than copies Independent 3rd party better than client generated Auditor generated better than client generated More reliable if good ICS

Financial statement assertions

Assertions about classes of transactions and events
Occurrence Completeness Accuracy Cut-off Classification

Exam Dec 05

Assertions about account balances

Existence Rights and obligations Completeness Valuation and allocation

Assertions about presentation and disclosure

Occurrence and rights and obligations Completeness Classification and understandability Accuracy and valuation

AUDIT EVIDENCE
Inspection

Exam Jun 07, Jun 09

Obtain Audit

Observation Recalculation Analytical procedures Inquiry Confirmation Reperformance

evidence

1- Transactions and events have been recorded in the correct accounting period is what management assertion? A B C D Valuation Cutoff Occurrence Classification

2- The most reliable form of audit evidence is: A B C D Visual observation of a transaction or event by the auditor Analytical procedures Oral representation of the third parties Written documents

3- The valuation assertion means: A That transactions and events have been recorded in the proper accounts B That assets, liabilities and equity interests are included in the financial statements at appropriate amounts and any resulting adjustments are appropriately recorded C At a given date the entity controls the rights to assets and that liabilities are the obligations of the entity D At a given date the entity controls the rights to assets and that liabilities are the obligations of the entity 4- The auditor's judgment as to what constitutes sufficient appropriate audit evidence is influenced by all the following factors except: A B C D The effectiveness of the entity's monitoring procedures The effectiveness of management's responses and controls to address the risks Source and reliability of the available information Persuasiveness of the audit evidence