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CMA Intermediate · Corporate Accounting and Auditing · Audit Engagement, Audit Program, Audit Documentation and Audit Evidence

According to SA 500, audit evidence on which the auditor bases reasonable conclusions is obtained by performing which of the following sets of procedures?

Audit evidence is obtained by performing risk assessment procedures and further audit procedures. Further audit procedures include tests of controls, when required or chosen, and substantive procedures such as tests of details and substantive analytical procedures, so the first option is correct.

  1. ARisk assessment procedures and further audit proceduresCorrect
  2. BOnly substantive procedures and management representations
  3. COnly tests of controls and inquiry of management
  4. DRisk assessment procedures and the issue of the audit report

Explanation

SA 500 states that audit evidence is obtained by performing (a) risk assessment procedures and (b) further audit procedures, which comprise tests of controls and substantive procedures. The other options leave out one of these two categories or add items that are not audit procedures for obtaining evidence.

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