(i) For each of the paired statements below identify the statement that describes the more reliable evidence;

(ii) State the criterion (from ASA 500.A31) that you applied in answer to (i) above.

To answer this question, please state the pair (by number); the statement you believe provides the more reliable evidence (a or b) and the criterion as it is stated in ASA 500.A31. For example if you believe that for Pair 1, statement a is more reliable and that the first listed criterion in ASA500.31 is the correct criterion, write:

Pair 1- a; Criterion- The reliability of audit evidence is increased when it is obtained from independent sources outside the entity.

 

Transcribed Image Text:

Pair Statements 1 2 A (a) The auditor wanted to know about the provision for doubtful debts so she asked the receivables manager tell her about communications with a particular debtor. 5 (b) The auditor wanted to know about the provision for doubtful debts so she inspected correspondence between the receivables manager and a particular debtor. (a) The auditor inquired with the warehouse manager about the way the stock count was conducted (b) The auditor observed staff performing a stock count. (a) While testing cut-off at Company B, a firm that has moderately effective internal controls over sales, the auditor checked the date on a sample of Shipping Notes. Pair Statements (b) The auditor checked the date on a sample of Receiving Notes to test cut-off at Company A, which has highly effective Internal controls over receiving. (a) The auditor inspected the subsidiary ledger to determine the existence of a receivable balance. (b) The auditor sent a confirmation to a debtor to test the existence of a receivable balance. (a) The auditor inspected the original of the client s Memorandum of Understanding, which was held at head office. (b) The auditor inspected a copy of the client s Memorandum of Understanding, which was held by the client s solicitor. LITML Pair Statements 1 2 A (a) The auditor wanted to know about the provision for doubtful debts so she asked the receivables manager tell her about communications with a particular debtor. 5 (b) The auditor wanted to know about the provision for doubtful debts so she inspected correspondence between the receivables manager and a particular debtor. (a) The auditor inquired with the warehouse manager about the way the stock count was conducted (b) The auditor observed staff performing a stock count. (a) While testing cut-off at Company B, a firm that has moderately effective internal controls over sales, the auditor checked the date on a sample of Shipping Notes. Pair Statements (b) The auditor checked the date on a sample of Receiving Notes to test cut-off at Company A, which has highly effective Internal controls over receiving. (a) The auditor inspected the subsidiary ledger to determine the existence of a receivable balance. (b) The auditor sent a confirmation to a debtor to test the existence of a receivable balance. (a) The auditor inspected the original of the client s Memorandum of Understanding, which was held at head office. (b) The auditor inspected a copy of the client s Memorandum of Understanding, which was held by the client s solicitor. LITML

Answer rating: 100% (QA)

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