AU-C 500 Audit Evidence, in the AICPA auditing standards refers to information produced by the entity....

AU-C 500 Audit Evidence, in the AICPA auditing standards refers to information produced by the entity. What must the auditor do to evaluate whether information provided by the client is sufficiently reliable?

Provides some specific steps the auditor should do with respect to information supplied by the client.

Expert Solution

DETAILS GIVEN IN QUESTION:

AU-C 500 - What must the auditor do to evaluate whether information provided by the client is sufficiently reliable?

Provides some specific steps the auditor should do with respect to information supplied by the client.

ANSWER:

The reliability of the audit evidence is influenced by its source and nature and the circumstances under which it is obtained

It is also influenced by the controls over its preparation and maintenance.

The auditor should ensure following to evaluate whether the information provided by client is sufficiently reliable:

1.Audit evidence must be obtained from independent sources outside the entity.

2. If audit evidence is generated internally, then its reliability is increased when the related controls, including those over its preparation and maintenance, imposed by the entity are effective.

3. Auditor shall obtain audit evidence directly as it is more reliable than audit evidence obtained indirectly or by inference.

4.Audit evidence should be in documentary form as it is more reliable than evidence obtained orally.

5. Auditor should gather audit evidence from Original documents as evidence provided by original documents is more reliable than audit evidence provided by photocopies, facsimiles, etc.

Some specific steps the auditor should do with respect to information supplied by the client.

1. Check source of audit evidence. It must be from independent sources.

2. Check internal controls in preparation and maintenance if audit evidence is generated internally.

3. Check documentary evidence for reliability. Original documents increase the reliability of the evidence.

ekkarill92 answered 2 years ago

The audit documentation is another of the International Standards for Auditing and Auditing Evidence. What do...

The audit documentation is another of the International Standards for Auditing and Auditing Evidence. What do you know about the standards? Explain the details.

Explain the relationships among auditing standards, types of evidence, and four audit evidence decisions.

The Auditing Standards Board established guidelines to assist auditors in evaluating the reliability of audit evidence....

The Auditing Standards Board established guidelines to assist auditors in evaluating the reliability of audit evidence. Discuss the criteria for the more reliable types of evidence and include an example for each.

Assignment #2 Integrated Audit Practice Case 1. AICPA auditing standards require a discussion among the engagement...

Assignment #2 Integrated Audit Practice Case 1. AICPA auditing standards require a discussion among the engagement team about the susceptibility of the financial statements to material misstatement. What are some of the purposes of this discussion? 2. The auditor reviews important financial statement numbers and ratios at both the beginning and the completion of the audit. Compare and contrast the purposes of (1) preliminary analytical procedures and (2) analytical procedures performed near the completion of the audit. 3. When you...

Describe evidence requirements of auditing standards

Information Produced by the Entity Example 3 – Audit procedures to address audit risks related to...

Information Produced by the Entity Example 3 – Audit procedures to address audit risks related to IPE from a transaction process Complete the following table, indicating the audit procedure that would be performed to address the identified risk. Risk 1: The IT application is not processing data correctly (incomplete or inaccurate). Information about ABC’s shipments is input manually into the IT application by the shipping clerk. The risk is that the shipping clerk mistypes the quantity shipped. Audit procedure to...

Worthington Department Stores Auditing standards require the auditor to obtain sufficient appropriate audit evidence (AS 1105.04:...

Worthington Department Stores Auditing standards require the auditor to obtain sufficient appropriate audit evidence (AS 1105.04: Audit Evidence). The audit firm of Hepple & Ramsey was investigated for the audit of Worthington. Worthington is a large discount catalog department store chain. The company recently expanded from 6 to 43 stores by borrowing from several large financial institutions and from a public offering of common stock. A recent investigation has disclosed that Worthington materially overstated net income. This was accomplished by...

Auditing Standards: According to Government Auditing Standards paragraphs and Government Performance Audit Textbook paragraphs below, why...

Auditing Standards: According to Government Auditing Standards paragraphs and Government Performance Audit Textbook paragraphs below, why do we need auditing standards in the opinion based on your observation? Government Auditing Standards Paragraphs: "Audits provide essential accountability and transparency over government programs. Given the current challenges facing governments and their programs, the oversight provided through auditing is more critical than ever. Government auditing provides the objective analysis and information needed to make the decisions necessary to help create a better future....

HKSA 500 “Audit Evidence” requires the auditor to obtain sufficient appropriate audit evidence to be able...

HKSA 500 “Audit Evidence” requires the auditor to obtain sufficient appropriate audit evidence to be able to draw reasonable conclusions on which to base the audit opinion. HKSA500 also identifies different types of audit procedures for obtaining audit evidence as well as offers guidance on how to assess the reliability of audit evidence. Required: For the four audit procedures which are Observation, Re-calculation, Inspection, Analytical procedures, describe an audit test using each of the procedure above to obtain evidence as...

Go to the AICPA Website to review the Clarified Auditing Standards–Learning and Implementation Plan. Next, choose...

Go to the AICPA Website to review the Clarified Auditing Standards–Learning and Implementation Plan. Next, choose one (1) of the eight (8) steps in the Clarified Auditing Standards–Learning and Implementation Plan. Based on the step you have chosen, analyze support for the action plan proposed, and make at least two (2) recommendations that would improve support of the action plan.

Question