77.1k views
3 votes
Question: Classify the given activity according to the eight types of audit evidence:

a) Physical examination
b) Confirmation
c) Inquiry
d) Inspection of documents

1 Answer

0 votes

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.

User JtR
by
8.5k points