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1. All the information used by the auditor in arriving at the conclusions on which the audit opinion is based is called A. Audit information B. Audit evidence C. Accounting records D. Corroborati... ng information According to PSA 500 (Audit Evidence), audit evidence refers to information used by the auditor in arriving at the conclusions on which the auditor's opinion is based. It in- 448 CPA EXAMINATION REVIEWER: AUDITING THEORY eludes both information contained in the accounting records underlying the financial statements and other information. 2. An entity's accounting records generally include the ·records of initial entries and supporting records including A. Confirmations from third parties. B. Information obtained by the auditor from such audit procedures as inquiry, observation, and inspection. C. Worksheets and spreadsheets supporting cost allocations. D. Other information developed by, or available to, the -auditor to permit him/her to reach conclusions through valid reasoning. According to PSA 500, accounting records include the records of initial accounting entries and supporting records, such as the following: . • checks and records of e lectronic fund transfers (EFT) • invoices • con tra cts . . . I entries, • the genera l and subsidiary ledge rs, Journa its h ·· · 1 staterne1 a nd other adjustments to t e ftnanc1 a . that are not reflected in formal journal entries . pd dsheets su • records such as works heets a n sprea ilia· · re co ne porting cost allocations, computations, tions, an d disclosures audit evi· Other information that the aud.itor may use as dence includes the following: [Show More]

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