Please show work for each problems

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Please show work for each problems
Answered 4 days AfterOct 04, 2021

Answer To: Please show work for each problems

Harshit answered on Oct 09 2021
121 Votes
6-1 LO1
Sufficient audit evidence refers to the quantity of evidence. The sufficiency depends on the professional judgment of the audit whether the evidence obtained for the selected item is enough. Another factor that decides the sufficiency of the evidence is the materiality of the item, the higher the materiality of the item higher will be quantity of audit evidence.
Appropriateness of audit evidence refers
to the quality of evidence, that is relevance and reliability of evidence. It depends on several factors like the source of information, prepared by auditee or auditor, obtained from auditee or third party etc.
Sufficiency and appropriateness of audit evidence are related to each other, the requirement for more evidence reduces as the quality of the evidence improves or vice versa. Therefore, we can say that the Sufficiency and Appropriateness of audit evidence are inversely related to each other.
6-1 LO1
Tracing examines a financial document and follows its trail to the financial accounts. Vouching works the other way around. The process of vouching begins with a figure on a financial statement, followed by the discovery of the original document that supports that number. The importance of direction in comprehending these concepts cannot be overstated.
It's also critical to understand what these methods are attempting to establish. The evidence of completeness is provided through tracing while evidence of occurrence is provided through vouching. It's easy to become confused. There are components of that financial statement we haven't looked at, tracing from a document to the financial statement shows us completeness but not an occurrence. There may be only one document that we were able to track down. In the other direction, we discover the polar opposite. Vouching provides evidence of occurrence but not of completeness. This is because we might be missing an original document that was never included in the financial statement number, to begin with.
6-10 LO2
    Sl. No.
    Procedure
    Type of procedure
    Assertion Tested
    a.
    Substantive Procedure
    Analytical Procedure
    Completeness
    b.
    Substantive Procedure
    Scanning
    Completeness
    c.
    Substantive Procedure
    Recalculation
    Accuracy
    d.
    Substantive Procedure
    Inspection of documents
    Occurrence
    e.
    Test of control
    Reperformance
    Accuracy
    f.
    Substantive Procedure
    Inspection of assets
    Rights and obligation
    g.
    Substantive Procedure
    Inspection of assets
    Existence
    h.
    Substantive Procedure
    Inspection of documents
    Rights and obligation
    i.
    Substantive Procedure
    External Confirmation
    Valuation
    j.
    Substantive Procedure
    Recalculation
    Rights and obligation
    k.
    Substantive Procedure
    Inquiry
    Rights and obligation
    l.
    Substantive Procedure
    Inquiry
    Accuracy
    m.
    Test of control
    Reperformance
    Existence
    n.
    Test of control
    Inquiry
    Cut-off
    o.
    Test of control
    Inspection of documents
    Rights and obligation
    p.
    Substantive Procedure
    External Confirmation
    Rights and obligation
6-12 LO2
a. The link between audit evidence and the statement or objective of the control being examined is referred to as relevance. In contrast, Audit evidence's reliability refers to the trustworthiness which is impacted by its source and type, as well as the specific conditions under which it was acquired.
b. The auditor determines the reliability of audit evidence on the basis of the following factors:
· Whether the source is internal or outside.
· The effectiveness of internal control prevailing.
· Whether obtained directly by the auditor or provided by the client.
· Whether the evidence obtained is documentary.
· Whether the document obtained is original of photocopies or facsimiles.
c.
    Sl. No.
    Judgement Error
    Nature of error
    Explanation
    1.
    Yes
    Relevance
    There may be changes that the client has recorded fake customers in its books
    2.
    No
    Reliability
    The decision of the auditor to visit the warehouse by himself will increase the reliability of evidence.
    3.
    No
    Reliability
    As no exceptions were observed, therefore...
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