Evidence Flashcards
What are the types of evidential matter?
Inspection
Observation
Inquiries (interviews)
Confirmation
Name the types of audit evidence and give examples for each?
Physical - auditors direct inspection or observation (photographs, videos, physical samples)
Testimonial – inquires, interviews
Documentary – evidence already exists (contracts, invoices)
Analytical –computations, comparisons
What are the two types of additional evidence or evidence of a different kind that supports a proof already offered in a proceeding of evidence and give some examples for each?
Underlying accounting data – often in electronic forms
General ledgers
Accounting manuals
Reconciliations
Corroborating evidence – both written & electronic form
Invoices
Contracts
Meeting minutes
Other written representations
Evidence is competent when it is valid, relevant, and reliable. Please describe each and provide examples?
Valid – evidence is based on sound reason or accurate info
Relevant – a logical relationship/importance to procedures
Reliable – consistency of results when info is measured or tested
Obtained by independent sources
Effective I/C provides more assurance to data
Knowledge obtained through observation, computation, inspection
Statistical sampling provides stronger evidence when a representative sample is required
Testimonial evidence is more credible when person is non-biased, can speak freely, and has direct knowledge
Examination of original documents
Explain sufficiency of audit evidence and how to determine whether enough exists.
Sufficiency is a measure of the quantity of evidence used for addressing the audit objective and supporting findings and conclusions
The greater the audit risk, the greater the quantity and quality of evidence required
Stronger evidence may allow less evidence to be used
Having a large volume does not compensate for lack of relevance, validity, or reliability.
