AUD 3.05 - Sufficient Appropriate Evidence

  1. Define audit evidence
    All the information the auditor uses to arrive at the conclusions on which the audit opinion is based.
  2. True / False: Accounting records alone provide sufficient evidence for the audit opinion
  3. True / False: The auditor must obtain conclusive evidence on which to form an opinion
    • False
    • The auditor must obtain persuasive, but not conclusive evidence
  4. 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
  5. Sufficiency refers to the _______ of audit evidence
  6. What are several adjectives to describe how audit evidence may be appropriate
    • Reliable
    • Relevant
    • Timely
    • Objective
    • Pertinent
    • Corroborated by other evidence
  7. 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
  8. An A/R confirmation is relevant to the (1 name the assertion) but not to the (2 name the assertion).
    • Existence
    • Valuation
  9. 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
  10. 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
Card Set
AUD 3.05 - Sufficient Appropriate Evidence
Becker Review 2017