Evidence comes in various types and has different degrees of reliability. Below are some pairs of various types of evidence: A bank confirmation versus observation of the segregation of duties between cash receipts and recording payment in the accounts receivable subsidiary ledger.An auditor’s recalculation of depreciation versus examination of raw material requisitions.A bank statement included in the client’s records versus the client’s shipping documents. Required: For each pair, indicate which type of evidence is more reliable. Justify your choices

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Answered: Evidence comes in various types and has…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Evidence comes in various types and has different degrees of reliability. Below are some pairs of various types of evidence:

A bank confirmation versus observation of the segregation of duties between cash receipts and recording payment in the accounts receivable subsidiary ledger.
An auditor’s recalculation of depreciation versus examination of raw material requisitions.
A bank statement included in the client’s records versus the client’s shipping documents.

Required:

For each pair, indicate which type of evidence is more reliable. Justify your choices

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