Question

For each situation below and on the next page indicate whether the first or second type of evidence is more reliable. Provide a rationale for your choice. Fully explain your rationale

a.A bank confirmation received by the auditor (first) versus observation of the segregation of duties between cash receipts and recording payment in the accounts receivable sub-ledger. (second)

b.Examine duplicate sales invoices when several competent people are checking on auditor's work (first) versus examining documents prepared by a competent person in a one-person staff. (second)

c. Question operating personnel about the possibility of obsolete inventory or slow moving inventory (first)versus recount client's inventory counts to make sure the recorded counts are accurate. ( second)