Evidence comes in various types and has different degrees of reliability. Following are some statements that compare

Question:

Evidence comes in various types and has different degrees of reliability. Following are some statements that compare various types of evidence.
a. A bank confirmation versus observation of the segregation of duties between cash receipts and recording payment in the accounts receivable subsidiary ledger.
b. An auditor’s recalculation of depreciation versus examination of raw material requisitions.
c. A bank statement included in the entity’s records versus shipping documents.
d. Physical inspection of common stock certificates held for investment versus physical examination of inventory components for a personal computer.

Required:
For each situation, indicate whether the first or second type of evidence is more reliable. Provide a rationale for your choice.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Auditing and Assurance Services A Systematic Approach

ISBN: 978-1259162343

9th edition

Authors: William Messier, Steven Glover, Douglas Prawitt

Question Posted: