1 Which of the following items would be the least persuasive

1. Which of the following items would be the least persuasive type of audit evidence?

(A) A confirmation of bank balances as of year-end received by the auditor directly from the bank.

(B) A letter of representation signed by the client’s president and chief executive officer.

(C) A copy of a bank statement provided to the auditor by the client.

(D) A schedule comparing an estimate of interest expense, prepared by the auditor, to the amount reported on the client’s trial balance.

2. Which of the following relates to the sufficiency of audit evidence?

(A) When no exceptions were discovered in a preliminary sample, the auditor decided that no further testing was necessary.

(B) The auditor reviewed vendor invoices to support a sample of purchases rather than rely exclusively on the client’s receiving reports.

(C) Because of a large number of small balances, the auditor decides to use negative accounts receivable confirmations rather than positive confirmations.

(D) The client maintains good perpetual inventory records, enabling the auditor to reconcile amounts to inventory counts that were taken prior to year-end.

Solution

1) C

Of all the options copy of bank statement provided by client is the least effective audit evidence. They can be easily tampered .They shouldn\'t be taken as concrete evidences

2) B

Auditor has to meet statutory duties while performing his duties. The method of verifying sample of purchases rather than solely relying on clients receiving reports is enough sufficiency of audit evidence