A4 (1) - AUDIT EVIDENCE

Question 1

TYPES OF AUDIT EVIDENCE

Answer 1

1- Underlying Accounting Records (invoices, contracts)
2-Corroborating Evidence (confirmations, inquiry)
3- Evidence in Electronic Form

Question 2

THIRD STANDARD OF FIELDWORK

Answer 2

The auditor must obtain sufficient appropriate audit evidence by performing audit procedures to
afford a reasonable basis for an opinion regarding the financial statements under audit.”

Question 3

THIRD STANDARD OF FIELDWORK - A. Reasonable Basis for an Opinion

Answer 3

1- cost-benefit relationship may be a valid reason for performing only certain procedures,

2- The auditor must exercise professional judgment in determining the procedures to be performed and the sufficiency and appropriateness of the evidence gathered.

Question 4

THIRD STANDARD OF FIELDWORK - Sufficiency of Audit Evidence

Answer 4

1. Greater risk of material misstatement implies more evidence will be required.
2. The quality of audit evidence: less audit evidence may be required when that evidence is of higher quality.

Question 5

THIRD STANDARD OF FIELDWORK - Reliability of Evidence

Answer 5

1-  Auditor's Direct Personal Knowledge
2- External Evidence
3- Importance of Effective Controls
4- Documentary Evidence
5- Information Produced by the Client

Question 6

THIRD STANDARD OF FIELDWORK - Evaluation of Audit Evidence

Answer 6

Achievement of audit objectives.

Question 7

SUBSTANTIVE PROCEDURES

Answer 7

1- Tests of Details

2- Analytical Procedures

Question 8

SUBSTANTIVE PROCEDURES - Analytical Procedures

Answer 8

1. Comparisons of Financial Data
2. Ratio Analysis
   3- Investigation of Significant Differences

Question 9

SUBSTANTIVE PROCEDURES - Analytical Procedures Documentation

Answer 9

1- Auditor’s expectation.

2. Factors considered in development of expectation.
3. Results of the comparison
4. Additional audit procedures to unexplained differences.
5. Results of such additional procedures

Question 10

TESTS OF DETAILS - Directional Testing

Answer 10

IF test starts with items In the accounting records, the proper assertion is most likely to be existence-the auditor searches for evidence indicating that the item truly exists and has not been created by management. On the other hand, If a test starts with source documents, It Is most likely related to the completeness assertion since the goal Is probably to make sure all transactions (as Identified by the source documents) have been included in the accounting records.

Question 11

TESTS OF DETAILS -Auditing Procedures

Answer 11

1- Footing, Cross footing, and Recalculation
2- Inquiry
3- Vouching
4- Examination I Inspection
5- Confirmation
6- Analytical Procedures
7- Re - performance
8- Reconciliation
9- Observation
10 -Tracing 
11- Cut-off Review
12- Auditing Related Accounts Simultaneously
13 - Representation Letter
14- Subsequent Events Review

Question 12

TESTS OF DETAILS - Relevant Assertions:- Account Balances (CVER)

Answer 12

1- Completeness
2- Valuation, Allocation, and Accuracy
3- Existence and Occurrence
4- Rights and Obligations

Question 13

TESTS OF DETAILS - Relevant Assertions :Transactions and Events (COVEU)

Answer 13

1- Completeness
2- Cut. Off
3- Valuation, Allocation, and Accuracy
4- Existence and Occurrence
5- Understandability and Classification

Question 14

TESTS OF DETAILS - Relevant Assertions :Presentation and Disclosure (CVRU)

Answer 14

1- Completeness
2- Valuation, Allocation, and Accuracy
3- Rights and Obligations, and Occurrence
4- Understandability and Classification