There Are Eight Types of Audit Evidence: Physical Examination, Confirmation

question 46

Essay

There are eight types of audit evidence: physical examination, confirmation, inspection, observation, inquiries of the client, reperformance, analytical procedures, and recalculation. 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) substantive tests of transactions, (3) analytical procedures, and (4) tests of details of balances.

---

Definitions:

Compounded Monthly

Interest calculation method where the interest is added to the principal every month, which then earns interest the following month.

Mortgage

A loan used to purchase real estate, secured by the property itself.

Outstanding Balance

The amount of money owed that has not yet been paid by the debtor.

Savings Account

A bank account that earns interest and is typically used for holding money that is not intended for daily expenses.