Final answer:
The student’s question entails classifying activities into types of audit evidence. Physical examination is counting tangible assets, confirmation is third-party verification, inquiry is information-seeking, and inspection of documents involves reviewing records.
Step-by-step explanation:
The student is asking to classify the given activities according to the eight types of audit evidence. The activities listed - physical examination, confirmation, inquiry, and inspection of documents - are all methods auditors use to obtain evidence during an audit. Here's how they align with the types of audit evidence:
- Physical examination refers to the inspection or count of a tangible asset. This can often be seen in the inventory counting process of a company.
- Confirmation is the receipt of a direct written response from a third party verifying the accuracy of information that was requested by the auditor.
- Inquiry involves seeking information of knowledgeable persons both inside and outside the entity.
- Inspection of documents means reviewing the company's records and transactions.
Each of these types of evidence helps an auditor form a conclusion regarding an entity's financial statements and internal controls.