Seven different types of evidence were discussed. The following questions concern the reliability of that evidence.
REQUIRED
a. Explain why confirmations are normally more reliable evidence than inquiries of the client.
b. Describe a situation in which confirmation will be considered highly reliable and another in which it will not be reliable.
c. Under what circumstances is the physical observation of inventory considered relatively unreliable evidence?
d. Explain why recalculation tests are highly reliable but of relatively limited use.
e. Give three examples of relatively reliable documentation and three examples of less reliable documentation. What characteristics distinguish the two?
f. Give several examples in which the qualifications of the respondent or the qualifications of the auditor affect the reliability of the evidence.
g. Explain why analytical procedures are important evidence even though they are relatively unreliable by themselves.