Question

Assume that you are a newly appointed junior auditor in KPMG, an auditing firm. After a 3-month rigorous training on the job, you have been awarded the certificate of completion and is now ready to embark on your very first assignment. Today, your first job was to evaluate the audit evidence
gathered by your team fromMuscat Trading and see if they are reliable or not based on ISA 500. The following are the evidences gathered in various forms:
a) You were asked by your senior auditor to get direct confirmation from an independent lawyer on the certainty level of winning the legal case of Muscat Trading against a customer. The lawyer gave you his verbal confirmation that based on the legal evidences presented, Muscat Trading is sure to win the case.
b) Muscat Trading is well-run by the management and has an effective internal audit team. When you asked for sales invoice, they gave you the duplicate (second copy) of sales invoice.
c) Your colleague, the auditor in-charge of cash count gave you her report as part of audit
evidence.
d) One of the files in the audit evidences was a photocopy of company directors’ minutes of
meetings signed by the company secretary.
e) You have interviewed several key officials of the company about some material transactions
related to purchases. Their verbal reply was all recorded on camera and was included as audit evidence.
Required: I want to get the order of which one is most reliable to the least reliable.with reasons

Answer 1

The reliability of evidence depends on the nature and source of the evidence and the circumstances under which it is obtained.

For example, in general:

• Evidence obtained from a knowledgeable source that is independent of the company is more reliable than evidence obtained only from internal company sources.
• The reliability of information generated internally by the company is increased when the company's controls over that information are effective.
• Evidence obtained directly by the auditor is more reliable than evidence obtained indirectly.
• Evidence provided by original documents is more reliable than evidence provided by photocopies or facsimiles, or documents that have been filmed, digitized, or otherwise converted into electronic form, the reliability of which depends on the controls over the conversion and maintenance of those documents.

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order - A- B - C - D - E