week 7

Question 1

What are the 2 roles of audit evidence

Answer 1

1. Support auditor during audit process as it attests to the confidence that the management is following the right procedures with respect to controls in place
2. Quality is very important in supporting auditor’s viewpoint

Question 2

What are the 3 factors determining quality of evidence

Answer 2

1. Relevance
   - is evidence applicable
2. Reliability
   - is the evidence trustworthy and can it be relied on to reflect actual state
3. Sufficiency
   -How well particular evidence addresses control activity

Question 3

What are the 8 types of evidence IIICORRS

Answer 3

Inquiry
- least credible evidence
- adds on to evidence with independent source

Inspection of records
- reliability of record depends on source and if source comes from system independently it is more reliable than from auditee

Inspection of tangible assets
- ensure assets exists and condition is recorded

Confirmation
-From external source used to corroborate evidence from internal source
- evidence from system confirms source by auditee

Observation
- obtain evidence by observing processes and done by 2 ppl

Reperformance
- verify evidence by reperforming procedure
- to verify adequacy of control

Recalculation
- verify calculation by recalculating what is done by auditee

Scanning
- scan through large data sets for outliers

Question 4

What are the 5 ways to obtain evidence IQBDE

Answer 4

1. Interviews
2. Questionnaires
3. Benchmarking
   - benchmark controls against other companies or standards
4. Data interrogation
   - from CAAT
5. Extraction of system parameter
   - retrieve system config manually or with tools