Other than objectivity of evidence, give and explain the other 5 factors that can affect the reliability of audit evidence. b) Chu has identified the following audit evidence: i) Bank statements which showed the bank balances of the client at year end. ii) Inventory count sheets showing the amount of inventory counted by the client warehouse staff at year end. iii) Bank reconciliation prepared by the accounts clerk without any review. Demonstrate the reliability concept to Chu by suggesting a more reliable evidence for each of the evidence Chu identified. Explain clearly why each of your suggested evidence more reliable by referring to one factor in (a).(Each factor in (a) can only be used ONCE.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Chu newly joins Simon & Co, CPA as an audit junior and his senior told him that the obtaining of audit evidence is a very important part of the audit and therefore the evidence obtained must be reliable.

a) Other than objectivity of evidence, give and explain the other 5 factors that can affect the reliability of audit evidence.

b) Chu has identified the following audit evidence:

i) Bank statements which showed the bank balances of the client at year end.

ii) Inventory count sheets showing the amount of inventory counted by the client warehouse staff at year end.

iii) Bank reconciliation prepared by the accounts clerk without any review.

Demonstrate the reliability concept to Chu by suggesting a more reliable evidence for each of the evidence Chu identified. Explain clearly why each of your suggested evidence more reliable by referring to one factor in (a).(Each factor in (a) can only be used ONCE.)

Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Audit Report
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education