Set 3 - AU Chapter 14 Audit Evidence

Question 1

When is audit evidence gathered primarily?

Answer 1

During risk response

Question 2

Auditors must gather evidence that is sufficient and appropriate. What if they can’t?

Answer 2

They cannot issue an unqualified opinion

Question 3

How is the auditor sure of the sufficiency of evidence gathered?

Answer 3

Depends on the risk - if assessed as high, more evidence needed. Also depends on quality of evidence - the higher the quality, the less is needed.

Question 4

What two factors of audit evidence contribute to the appropriateness of evidence?

Answer 4

Relevance and reliability

Question 5

Define relevance of audit evidence

Answer 5

Relevance refers to making sure the audit procedures test the assertion under question.

Question 6

Define reliability of audit evidence

Answer 6

Refers to nature of evidence, external is more reliable than internal etc.

Question 7

What are the 3 levels of audit evidence reliability?

Answer 7

internally generated
externally generated but held by client
externally generated

Question 8

What are the 4 types of audit evidence

Answer 8

physical evidence
confirmation evidence
documentary evidence
analytical evidence