Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › Reliability of audit evidence
- This topic has 3 replies, 2 voices, and was last updated 5 months ago by Kim Smith.
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- May 24, 2024 at 12:17 pm #705923
Hi, hope you’re well! Could you please clarify my doubts below?
Order the evidence in terms of reliability starting with the MOST reliable audit evidence for
the external auditor.
a) Conducting meeting with the company lawyers
b) Written representation obtained from B.O.D
c) Recalculation of provision by an Internal audit team member of the audit client.
d) Inquired form TCWG
Correct ans is as follows:
i. a, b, c & d
ii. b, a, c & d
iii. d, a, b & c
iv. a, c, b & dI chose option D but the answer is option A. Could you confirm which is the right answer?
Also, I wanted to ask when it comes to questions like these, which source is the most reliable between audit evidence obtained by the auditors themselves (eg: a cash count conducted by the audit team member) and external confirmations from third party (eg: bank confirmation report)? Which would be ranked first in terms of reliability?
Thank you!
May 24, 2024 at 1:03 pm #705926The “rules of thumb” are described in s.3 of our chapter 10:
– External evidence is better than the entity’s records i.e. internal
– Evidence obtained directly by the auditor is better than evidence obtained via the client
– Written is better than oral
– Originals are better than copiesa) Conducting meeting with the company lawyers – is best because auditor is obtaining evidence directly from an external source
d) Inquired form TCWG – is least reliable because it’s oralb) Written representation obtained from B.O.D – is audit evidence from an internal source
c) Recalculation of provision by an INTERNAL audit team member of the audit client – presumably documented/evidenced in some way, but not as good as written representations (which are very specific).You don’t say what is the source of the Q – unless it’s a past exam Q I shouldn’t worry about it too much – in an exam Q there should always be just one correct answer according to the rules.
May 24, 2024 at 1:06 pm #705927Thanks! What about the doubt regarding which source is the most reliable between audit evidence obtained by the auditors themselves (eg: a cash count conducted by the audit team member) and external confirmations from third party (eg: bank confirmation report)? Which would be ranked first in terms of reliability?
May 24, 2024 at 2:04 pm #705930Oops sorry, “auditor-generated” evidence is the most reliable.
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