QUESTION 6: EVIDENCE & PROCEDURES You are the audit senior on the audit of Pole Leening for the year ended 30 September 2018. Pole Leening is a large retail client and one of the audit team members you are responsible for supervising is Clara, a new graduate. This is her first audit and she has asked you to clarify the concept of 'sufficient appropriate audit evidence to provide a reasonable basis for the audit opinion'. "Well, how do you determine how much is enough?" she asks. She is a little frustrated with you when you reply: "It depends". Relevant information regarding the two account balances that Clara is to audit includes: Bank & Cash Property, Plant & Equipment $250,000 $750,000 b) Experienced client staff, no errors New client staff; a number of errors last last year year c) 3 bank accounts, approximately 18,000 assets, varying in value, across equal in value, all in Auckland 25 branches in the Asia-Pacific region ey Clara received a bank confirmation Clara enquired of client staff regarding direct from the bank as at 30 appropriateness of depreciation rates September 2018 during her interim visit on 22 June 2018 a d Required: Explain briefly how the information above will affect the sufficiency of audit evidence that wil be required. Your explanation should make clear how differences between the two account balances that Clara has been asked to audit, lead to differences in evidence requirements. Please lay out your answer as per the table below, using the example supplied in italics to guide you: Bank & Cash (BC) Property, Plant & Equipment (PPE) Marks EXAMPLE: Materiality Generally, the more material an account balance is the more evidence will be required for it. BC is less material, so will require PPE is more material, so will require a) less evidence. Risk more evidence. b 1 1 c) Practical issues 1 d) Population Size e) Relevance 1 1 1 1 4 f) Reliability (Source, nature, timeliness and objectivity) [TOTAL: 13 MARKS]