Gathering a combination of evidence helps auditors adequately evaluate risk. As an auditor, you will evaluate the evidence that has been gathered on Anthony's Orchard's inventory.
Review the audit objectives and the substantive test procedure that was performed. Identify if the evidence can be classified under the financial statement column (F/S) as existence or occurrence (E), completeness (C), rights and obligations (R), valuation or allocation (V), or presentation and disclosure (P). In the sufficient column, indicate if each item represents appropriate audit evidence in light of relevance, reliability, independence, effective controls, and direct observance--Yes (Y) or No (N).
Write a 1- to 2-page response explaining the difference in evidence and test of controls. Consider the evidence associated and objectives for using each procedure.
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Audit evidence is the information that the auditor uses in reaching the conclusion on which the audit opinion is based. This information includes facts in accounting records. Also, when the auditors perform audit procedures, all the information obtained during these procedures is audit evidence. Accounting records include legers, journals, records of fund transfer, invoices, worksheets, cost allocations, calculations, and spreadsheets. Audit evidence also includes minutes of meetings, confirmations from third parties, industry ...
The answer to this problem explains Anthony's Orchard's inventory. The references related to the answer are also included.