Question

1) Obtaining sufficient audit evidence over the sales of a given company means that the auditor

	a) tested all sales transactions for the given period
	b) tested more than 50% of the sales transactions for the given period
	c) tested a reasonable sample of sales transactions for the given period
	d) tested only the sales transactions with an amount higher than the materiality

Answer 1

Ans: C - Tested a reasonable sample sales transactions for the given period. The auditor must plan and perform audit procedures to obtain sufficient appropriate audit evidence to provide a reasonable basis for his opinion. Sufficiency is the measure of the quantity of audit evidence. The quantity of audit evidence needed is affected by the following: a) Risk of material misstatement or the risk associated with the control. As the risk increases, the amount of evidence that the auditor should obtain also increases. b) As the quality of the evidence increases, the need for additional corroborating evidence decreases.