Question

Audit evidence may be gathered from which of the following sources to be reliable?

1) Parties external to the auditee
2) The auditee
3) Computerized sources
4) Many sources including the underlying accounting data

Answer 1

Audit evidence may be gathered from parties external to the auditee, the auditee themselves, computerized sources, and multiple sources including the underlying accounting data.

Step-by-step explanation:

When gathering audit evidence, it is important to ensure its reliability. There are several sources from which reliable audit evidence may be gathered:

1. Parties external to the auditee: These are third parties who have relevant information or documentation that can support the audit process. Examples include banks, suppliers, and customers.
2. The auditee: The auditee themselves can provide evidence in the form of financial statements, internal records, and other relevant documents.
3. Computerized sources: With the increasing use of technology, auditors often gather evidence from computerized sources such as accounting software, databases, and electronic records.
4. Many sources including the underlying accounting data: Auditors gather evidence from multiple sources, including the underlying accounting data. This may involve analyzing transactions, reviewing supporting documentation, and performing substantive testing.