(a) Define the term 'audit evidence'.

State the various areas that need to be comprised in gathering audit evidence. (4 marks)

(b) In conducting an audit, the auditor may obtain evidence by several procedures.

Explain these procedures and for each procedure, provide TWO (2) examples that the

auditor can use during the course of the audit. State the purpose of carrying out

the procedures. (16 marks)

(c)TG is a charitable organization that was founded in 1997 by two Jamaican Athletes.

The following are the main sources of funding for the organization: -

- Donations from the public, which is mainly in the form of cash collected at

Supermarkets.

- Cheques sent in through the post to the charity's head office.

- Direct transfers via RTGS and ACH by wealthy individuals occasionally, sometimes

on condition that the money is used for a specific purpose. The constitution of the

charity specifies the purpose of the charity, and states that no more than 10% of the

charity's income each year may be spent on administration costs.

Required

The auditors in auditing the financial statements have a concern in relation to inherent

risk.

Identify the inherent risks that the auditors would need to consider. (15 marks)