W11 Audit Evidence

Question 1

What is sufficient evidence? How is it assessed

Answer 1

Relates to the quantitative features of evidence

(Do we have enough evidence to form an opinion?)

Assessed by:

• the persuasiveness of the evidence
• the risks involved
• the importance/materiality of the matter in question

Question 2

What is appropriate evidence

Answer 2

Appropriateness relates to the qualitative features of evidence

Specifically its relevance and reliability

• Do we have the right type of evidence?
• Is that evidence of good quality?

Question 3

What are the most and least reliable audit evidences? (Rank them)

Answer 3

1. The most reliaable evidence is that DIRECTLY GENERATED BY THE AUDITOR
2. From independent 3rd parties
3. least reliable evidence is that generated by the client

*Documentary evidence (written) generally considered to be more reliable than oral evidence

Question 4

What are the sources of evidence

Answer 4

1. Test of controls
2. Substantive procedures
   - test of detail
   -analytical procedures

Question 5

When do auditors have to rely on the work of others

Answer 5

• rely on the work of internal auditors
• on experts if they lack the required technical knowledge to gather sufficient appropriate audit evidence to form an opinion

the auditor must evaluate whether the expert has the necessary competence, capability and objectivity for the purpose of the audit (use professional judgement)

Question 6

What are the financial statement assertions for (classes of transaction and events, and related disclosures for the period)

Answer 6

Occurrence

Completeness

Accuracy

Cut-off

Classification

Presentation

Question 7

What are the financial statement assertions for (account balances and related disclosures at the period end)

Answer 7

Existence

Rights & Obligations

Completeness

Accuracy

Valuation and Allocation

Classification

Presentation