For each situation presented below, indicate which means of

gathering evidence would be considered more reliable AND

indicate a reason from the following list:

A. Independent source of the information (Independence of

provider);

B. Auditor's direct knowledge;

C. Knowledgeable source (qualifications of individuals

providing the information);

D. Degree of objectivity versus subjectivity; and

E. Functioning system of internal controls.

CHOOSE ONLY ONE LETTER.

DO NOT DISCUSS your answer.READ CAREFULLY.

AnswersItemNumber more reliableLetter for reason

a.___________

b.___________

c.___________

d.___________

a. In testing assets, (1) the auditor verifies the cost of

additions to the "land" account, or (2) the auditor considers

the adequacy of the "allowance for doubtful accounts".

b. 1.The auditor relies on an analysis prepared by the

controller of gross margin to sales for the current and prior

periods; or (2)The auditor calculates gross margin to sales

and compares to similar data for prior periods.

c. As a test of accounts receivable, (1) the auditor reviews a

confirmation received directly from the customer of the company

being audited, or 2. The auditor asks the controller if the

amounts are correct.

d. Auditor tests two segments of the company.1. In the first

segment, employees check each other's work; 2. In the second

segment, no one checks the work.