A)There Are Seven Types of Audit Evidence: Inspection,observation,inquiries of the Client,external

question 48

Essay

A)There are seven types of audit evidence: inspection,observation,inquiries of the client,external confirmation,recalculation,reperformance,and analytical procedures.For each of the following types of audit tests,indicate the type(s)of evidence that can be obtained through the test: (1)tests of controls,(2)analytical procedures,and (3)substantive tests of balances.B)Contrast the circumstances in which the auditor would choose not to test controls with those in which he or she would perform tests of controls.C)Types of audit tests include tests of controls,analytical procedures,and tests of details of balances.Rank these types of tests from least costly to most costly.

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Definitions:

Contribution Receivable

An amount pledged to be paid to a company or organization as a donation or investment, but which has not yet been received.

Ultimate Collection

A term typically referring to the most complete or finest selection of items in a particular category or series.

Government Grants

Financial assistance given by the government to individuals, organizations, or companies in support of activities that are considered beneficial to the public interest.

Profit-Oriented Enterprise

An organization that operates with the primary goal of earning profits, as opposed to non-profit organizations.