Final Review Part III

Question 1

Audit Evidence

Answer 1

• consist of underlying accounting data
• corroborating evidence

Question 2

Sufficient Audit Evidence

Answer 2

• RMM = more risk = more evidence
• quality of audit evidence = low quality = more evidence

Question 3

Appropriate Audit Evidence

Answer 3

• reliability: dependent
  –> auditor direct knowledge
  –> external evidence
  –> internal evidence
  –> oral evidence
• relevance: related to the assertion under consideration

Question 4

Statistical Sampling

Answer 4

• measure the sufficiency of the evidence
• design an efficient sample
• quantify sampling risk

Question 5

Inventory

Answer 5

• an auditor is not responsible for counting the inventory
• we are observing it