Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Johnny and Rebecca are discussing the different types of evidence they plan to collect as part of the audit of a major client; a large,
Johnny and Rebecca are discussing the different types of evidence they plan to collect as part of the audit of a major client; a large,
decentralized firm with operations all over the continental United States. There has been some disagreement between Johnny and
Rebecca as to which types of audit evidence might be considered the most reliable, so they have approached you, their supervisor, to
settle the dispute. Which of the following responses would be the most appropriate in this scenario?
Generally accepted auditing standards provide strict guidelines on what types and the quantity of evidence that must be
collected for each assertion.
All audit evidence, regardless of how it was gathered and from whom it was gathered is legitimate and compelling, and
represents sufficient, appropriate audit evidence.
The legitimacy and reliability of the audit evidence will be determined by how and from whom it was gathered. For example,
evidence obtained externally is usually more reliable than evidence obtained internally.
Evidence obtained from senior management and the internal audit function is generally considered the most reliable, as
these parties have the most knowledge of the client.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started