Study Unit 7 - Reporting, Work Papers & Evidence

Question 1

7 Work Paper best practices

Answer 1

1. Must Identify the engagement & describe the contents & purpose of the w/p’s
2. Should be neat & uniform
3. Economical, avoiding unnecessary copying, listing, or scheduling.
4. Arranged in a logical and uniform style.
5. Clear, concise & complete
6. Include relevant & significant information.
7. Written in a simple style

Question 2

Types of flowcharts

Answer 2

1. Horizontal: Depict departments in vertical columns.
2. Vertical: PResent successive steps in a top-to-bottom format
3. Data-Flow Diagram: Shows how data flows in an information system.

Question 3

4 Qualities of Information

Answer 3

1. Sufficient: Factual, adequate & convincing.
2. Reliable: Best attainable information.
3. Relevant: Supports engagement results.
4. Useful: Helps org. meet its goals.

(Should Rick Record Uniformly)

Question 4

4 Forms of LEGAL evidence

Answer 4

1. Direct evidence (Testimony)
2. Circumstantial evidence (One fact leads to another
3. Conclusive evidence (absolute proof)
4. Corroborative evidence (fact that can be inferred from other evidence)

Question 5

4 Forms of AUDIT evidence

Answer 5

1. Physical Information: Obtained from auditor’s direct observation.
2. Testimonial Information
3. Documentary information
4. Analytical information

Question 6

Degree of Persuasiveness

Answer 6

1. Auditors physical examination provides most persuasive form of evidence
2. Direct observation is the next most persuasive.
3. Third party gathered information is less persuasive than information gathered by the auditor
4. Information originating with the client can be somewhat persuarive in documentary form.