5.27 TYPES AND PERSUASIVENESS OF AUDIT EVIDENCE ACCOUNTS PAYABLE OLO1, 2, 3 The audit team is preparing for audit of accounts payable at a continuing client, Springs Ltd. Springs has grown rapidly this year and introduced new products into its business. The new products are pur-chased from overseas suppliers. Finn is new to the audit team and keen to make an impression. Finn suggests that the team use payable confirmations to gather evidence about the completeness of accounts payable because they provide highly persuasive evidence. Finn has already asked the client for a list of accounts payables from which the sample of suppliers will be selected for the account payable confir- mation letters. Required Assess Finn's suggestion and explain its strengths and weaknesses. | 5.30 USING THE WORK OF AN EXPERT OLO4 The audit partner for Kumar Ltd is assessing the resources required to complete the audit. The partner is aware that Kumar Ltd has a material balance in spesialised machinery and decides that an expert will be needed to provide evidence for the valuation assertion for the machinery. Required Explain what sources the auditor partner could use to gather information about the competence, capa-bilities and objectivity of an expert. 5.32 REVENUE ASSERTIONS 1 ODLO1, 2, 3 The audit program for the Revenue account for a client has been drafted. The following item appears: + Kem Assertion Detailed audit procedure Select a sample of sales from the sales journal and ensure each Completeness sales invoice is supported by an authorised delivery docket and approved customer order. 1 Required 1. (a) Does the procedure address the stated assertion? Explain. 2. (b) If your answer to (a) is no, provide the correct assertion or explain what work would be required to address the assertion. 3. (c) Explain what type of evidence is obtained by performing the stated procedure. How persuasive is it? Source: Adapted from the CA Program's Audit & assurance exam, July 2010