Audit evidence comes in various types and has different degrees of reliability. Below are some

statements that compare various types of evidence.

$($A$)$ A bank confirmation received directly from the client$$s financial institution VERSUS an

auditor$$s observation of the segregation of duties between cash receipts and recording

payment in the accounts receivable subsidiary ledger.

$($B$)$ An auditor$$s recalculation of depreciation VERSUS examination of a client$$s raw material

requisitions.

$($C$)$ A bank statement included with the entity$$s bank reconciliation VERSUS examination of

a client$$s shipping documents.

$($D$)$ Physical inspection of common stock certificates held for investment VERSUS physical

examination of inventory.

$($E$)$ Information obtained at a dinner conversation with the client$$s lender VERSUS

confirmation received from a client$$s customer.

REQUIRED:

For each situation, indicate whether the first or second type of evidence is more reliable. Provide

a rationale for your choice.