Question

Which of the following examples of audit evidence is the most persuasive?

1) Real estate deeds that were properly recorded with a government agency.
2) Canceled checks written by the chief financial officer and returned from a bank.
3) Time cards for employees that are stored by a manager.
4) Vendor invoices filed by the accounting department.

Answer 1

Canceled checks written by the chief financial officer and returned from a bank are the most persuasive example of audit evidence.

Step-by-step explanation:

The most persuasive example of audit evidence among the given options is canceled checks written by the chief financial officer and returned from a bank. Canceled checks provide concrete proof of financial transactions and are typically considered reliable evidence in audits. Here is a step-by-step explanation:

1. Canceled checks are physical documents that have been processed and returned by a bank after payment has been made. They contain the payee information, date, and amount.

2. The fact that the checks were written by the chief financial officer adds credibility to the evidence. The CFO is a key role in managing the organization's finances and is responsible for authorizing and signing checks.

3. The audit team can verify the authenticity of the canceled checks by comparing the information on the checks with the corresponding entries in the company's financial records.

4. Canceled checks are considered strong evidence because they provide tangible proof of financial transactions and can be traced back to specific payments made by the organization.