The following are five situations,

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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The following are five situations, each containing two means of accumulating evidence: 1. Confirm receivables with consumers versus confirming accounts receivable with business organizations.
2. Examine duplicate sales invoices when several competent people are checking each other’s work versus examining documents prepared by a competent person on a one-person staff.
3. Physically examine inventory of parts for the number of units on hand versus examining them for the likelihood of inventory being obsolete.
4. Confirm a bank balance versus examining the client’s bank statements. 5. Obtain a physical inventory count from the company president versus physically counting the client’s inventory.
Required:
a. Identify the factors (at least 5 factors) that determine the reliability of evidence. For each factor, give one example of evidence that is likely to be reliable.
b. For each of the five situations, state whether the first or second type of evidence is more reliable.
c. For each situation, state which of the factors in (a) affected the reliability of the evidence.

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