Reference no: EM13859065

Problem Statement: The auditor for ZZZZ Best, Larry Gray, lacked a sufficient knowledge of the client, the client's business and the client's industry.

For the above problem discuss the following:

Give several examples from the case that support the problem related to the knowledge expected of the auditor.

Use details from the attached file.

Describe how the auditor's lack of industry/client specific knowledge affected the gathering of at least four types of audit evidence collected by the auditor and the management assertions associated with each type of evidence. Include a definition for the assertions and types of evidence used in your answer.

Documentation - Existence/occurrence, Valuation/allocation, Rights and obligations

Physical examination - Existence/occurrence, valuation/allocation

Analytical procedure - Overall reasonableness

Confirmation - Existence/occurrence, Valuation/allocation, Rights and obligations)

Describe in detail what makes these pieces of evidence unreliable using any of the five factors of competent evidence. (Five factors of competent evidence: independence of the provider, direct knowledge of the auditor, competence of the provider, strength or weakness of internal control, objectivity of the measurement instrument.)

Documentation - Direct Knowledge of the Auditor, Effectiveness of the internal Control

Physical examination - Direct knowledge of auditor, Independence of provider, Qualifications of the provider

Analytical procedure - Effectiveness of the internal Control

Confirmation - Independence of provider, Qualifications of the provider

Attachment:- ZZZZ BEST COMPANY Case.docx