Chapter 3: Audit Evidence

Question 1

What is meant by Sufficient Evidence? and how it affected by?

Answer 1

Sufficient is the Measure of Quantity and
Affected by:
1. Risk
2. Materiality
3. Auditor’s Knowledge & Experience
4. Quality of evidence
5. Strength of Internal Control

Question 2

What is meant by Appropriate Evidence? and how it affected by?

Answer 2

Appropriate is the Measure of Quality and affected by Relevance and Reliability.

Question 3

What is Reliability of Evidence?

Answer 3

1. Control (e.g.pre-numbered documents)
2. Original (vs. photocopy or fax)
3. Directly (e.g. observation)
4. External (e.g. confirmation)
5. Documentary (e.g. written minutes)

Question 4

What are the Types of
Audit Procedures.?

Answer 4

1) Observation
2) Inspection
3) Recalculation
4) Inquiry
5) Reperformance
6) External Confirmation
7) Analytical Procedures

Question 5

What are the assertions of account balance?

Answer 5

1) Existence
2) Right and Obligation
3) Accuracy, Valuation and Allocation
4) Completeness
5) Classification
6) Presentation

Question 6

What are the assertions of Classes of transaction?

Answer 6

1) Occurrance
2) Cut-Off
3) Accuracy
4) Completeness
5) Classification
6) Presentation

Question 7

Requirment for Use of Management’s Expert?

Answer 7

1. Evaluate the competence, capabilities and
   objectivity of that expert.
2. Obtain an understanding of the work of
   that expert.
3. Evaluate the appropriateness of that
   expert’s work.