Gathering and documenting evidence is required to support the auditor’s opinion on the fair presentation of the client’s financial statements. It is important to recognize characteristics of audit evidence. Two terms discussed in this chapter related to appropriateness of audit evidence are relevance and reliability.

Required
Listed below are situations involving audit evidence. Determine if the situation refers to the (1) relevance or (2) reliability of audit evidence, or (3) to both.
a. Audit evidence is obtained from an external party rather than relying solely on internally generated client information.
b. The auditor inspects an original lease document.
c. A sample of recorded accounts receivable is used when the objective of the audit procedure is to test the existence of accounts receivable.
d. Client management estimates an impairment loss on inventory.
e. The auditor uses current-year salaries, instead of prior-year salaries, to estimate an end-of-year bonus accrual.
f. Before using a sample of sales invoices for an audit procedure, the auditor determines if the listing of the client’s sales invoices is complete by verifying that all prenumbered sales invoices are accounted for.