Question

Audit evidence concerning segregation of duties ordinarily is best obtained by?

1) Reviewing job descriptions and organizational charts
2) Observing employees performing their duties
3) Examining documents and records
4) All of the above

Answer 1

The best evidence concerning the segregation of duties is obtained by reviewing job descriptions and organizational charts, as well as by observing employees and examining documents and records.

Step-by-step explanation:

Audit evidence concerning the segregation of duties is a key component in evaluating the internal control environment of an organization. To obtain the best evidence, all of the following methods are recommended:

• Reviewing job descriptions and organizational charts to understand the formal assignment of duties.
• Observing employees performing their duties to see the actual implementation of segregation.
• Examining documents and records to verify that procedures are being followed as described and responsibilities are being segregated according to policy.

These methods collectively provide a comprehensive overview of how the segregation of duties is managed within the organization, offering insight into both the design and operational effectiveness of internal controls.

Observation, interviews, and an analysis of documentation are vital in gathering sufficient audit evidence.