All the information the auditor uses to arrive at the conclusions on which the audit opinion is based.
True / False: Accounting records alone provide sufficient evidence for the audit opinion
False
True / False: The auditor must obtain conclusive evidence on which to form an opinion
False
The auditor must obtain persuasive, but not conclusive evidence
True / False: An audit procedure may be omitted due to the cost involved, or difficulty in obtaining the evidence
False
The auditor should not omit a procedure; however, alternate procedures may be used that are of lower cost or difficulty as long as they provide sufficient appropriate evidence
Sufficiency refers to the _______ of audit evidence
Quantity
What are several adjectives to describe how audit evidence may be appropriate
Reliable
Relevant
Timely
Objective
Pertinent
Corroborated by other evidence
Name 4 types of reliable audit evidence (from most to least reliable)
A-E-I-O
(1) Auditor's direct personal knowledge through observation, physical examination, inspection, or recalculation
(2) External evidence from independent sources outside the enterprise
** sent directly to an independent auditor (more reliable)
** received and held by the client (less reliable)
(3) Internal Evidence such as effective internal controls, but also includes purchase orders, sales orders, the general ledger, management reports (documentary evidence)
(4) Oral Evidence such as inquiries and conversations
An A/R confirmation is relevant to the (1 name the assertion) but not to the (2 name the assertion).
Existence
Valuation
According to the PCAOB, the relevance of audit evidence depends on these 2 items
The design of the audit procedure (does it test the assertion directly; does it test for under- or over-statement)
The timing of when the test is performed
What documentation specifically related to audit procedures should be captured?
The NET of further audit procedures
The linkage of the procedures with assesed risks at the relevant assertion level
The results
The conclusions reached regarding the use of prior period audit evidence in evaluating the current operating effectiveness of controls
