Chapter 8 Introduction To Audit Evidence

Question 1

Audit evidence

Answer 1

All the information that the auditor uses ti arrive at the conclusion reached in the audit opinion
It must be sufficient and appropriate

Question 2

Sufficient audit evidence

Answer 2

Quantity enough to support audit opinion
Factors
1. Risk assessment
2. Materiality
3. Prev audit result
4. Audit procedure result
5. Source and reliability

Question 3

Appropriate audit evidence

Answer 3

1. Relevant: must pertain to the FS assertions
2. Reliable:
   Written>oral
   Original> copies
   Auditor generated > client generated
   External> internal
   Better IC>

Question 4

Assertions

Answer 4

Representations explicit or otherwise with respect to the recognition, measurement, presentation of information in FS that are inherent in management representing that FS are prepared according to appropriate FR framework

Question 5

Assertions about class of transaction and events

Answer 5

OCCCAP
O= occurrence
C= completeness
C=cut off
C=classification
A= accuracy
P= presentation

Question 6

Assertions about account balances and disclosures at the year end

Answer 6

OCCAPE
O=obligation and rights
C=completeness
C=Classification
A=accuracy, valuation
P= presentation
E= existence

Question 7

Management’s expert

Answer 7

An individual or organisation who is an expert in a field different to accounting or audit whose work is used by entity in the preparation of financial statements
Auditor must check the reliability of, competency, objectivity of expert before relying in his work