The following are eight situations, each containing two means of accumulating evidence:
1. Confirm accounts receivable with business organizations versus confirming receivables with consumers.
2. Physically examine 8-cm steel plates versus examining electronic parts.
3. Examine duplicate sales invoices when several competent people are checking one another’s work versus examining documents prepared by a competent person in a one-person staff.
4. Physically examine inventory of parts for the number of units on hand versus examining them for the likelihood of inventory being obsolete.
5. Confirm a bank balance versus confirming the oil and gas reserves with a geologist specializing in oil and gas.
6. Confirm a bank balance versus examining the client’s bank statements.
7. Physically count the client’s inventory held by an independent party versus confirming the count with an independent party.
8. Physically count the client’s inventory versus obtaining a count from the company president.
REQUIRED
a. For each of the eight situations, state whether the first or second type of evidence is more reliable.
b. For each situation, state which of the factors discussed in the chapter affect the appropriateness of the evidence.