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6-22 Classify the four types of audit evidence

Classify by type of audit evidence: (1) directly from outsiders, (2) indirectly from outsiders, (3) internal but validated externally, and (4) entirely internal.

1. Bank statement sent directly to the auditor by the bank.
2. Bank statement obtained from client's files.
3. Vendor invoice in client's unpaid voucher file.
4. Duplicate customer invoices in filled order file.
5. Time cards in payroll department files.
6. Credit memo in customer's account file.
7. Material requisitions filed in stock room.
8. Creditor's outstanding balance statement in client's files.
9. Management spreadsheets documenting accounting estimates.
10. Cleared checks returned with bank statement in (1) above.
11. Memo from collection agency on collectibility of a customer's balance.
12. Authorization from treasurer to write-off a customer's account.

Rank these four in terms of least to most persuasive evidence (quality of evidence).

Solution Preview

1. Bank statement sent directly to the auditor by the bank. =1
2. Creditor monthly statement obtained from client's files. =2
3. Vouchers in client's unpaid voucher file. =2
4. Duplicate sales invoices in filled order file. =3
5. Time tickets filed in payroll department. =4
6. Credit memo in customer's file. =3
7. Material requisitions filed in storeroom. =4
8. Bank statement in client's ...

Solution Summary

Your tutorial is 224 and gives the "pecking order" for evidence quality and classifies these.

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