(a) Helen, the audit trainee, is conducting a field audit. She has no idea of how to identify the competent audit evidences when performing audit procedures. You, the audit manager, are required to explain to her what factors highly affect the competence of audit evidences. (5 marks)

(b) In each of the four following situations, you, the auditor, face two sources of evidence resulting from your audit procedures. For each of the above two situations, identify which of the two sources gives more reliable evidence, and give ONE reason to support your choice. (4 marks)

Situation 1:

Source A: Observation of the clients physical counting of inventories at the yearend.

Source B: Confirmation of the clients inventories held at an independent pubic warehouse by requesting a confirmation from that warehouse management.

Situation 2:

Source A: Confirmation of the clients bank balance at the year-end directly with the bank.

Source B: Checking the balance of the clients bank accounts against the bank statement kept by the client.

Question B2 Part I Auditors are required to set the specific audit objectives for testing the stated financial statement assertions when performing audit procedures, namely, classification, valuation, occurrence, completeness, cut-off, existence, valuation and right/ownership. Further, auditors are needed to collect competent and sufficient appropriate audit evidences. Required: (6) Helen, the audit trainee, is conducting a field audit. She has no idea of how to identify the competent audit evidences when performing audit procedures. You, the audit manager, are required to explain to her what factors highly affect the competence of audit evidences. (5 marks) (b) In each of the four following situations, you, the auditor, face two sources of evidence resulting from your audit procedures Situation Source A Observation of the client's physical countine of inventories at the year- end Source B Confirmation of the client's inventories held at an independent pubic warehouse by requesting a confirmation from that warehouse management Confirmation of the client's bank Checking the balance of the client's bank accounts against the bank statement kept by the client. with the bank For each of the above two situation identify which of the two sources gives more reliably evidence, and give ONE reason to support your choice by using the following table. (4 marks Page 8 of 1