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Sufficient Appropriate Audit Evidence. The auditor finds it necessary to rely on audit evidence that is persuasive rather than conclusive and will often seek audit evidence from different sources or of a different nature to support the same assertion. The reliability of audit evidence is not only important in determining sufficiency (quantity) of the information, but also the appropriateness (quality) of the information. Reliability of audit evidence is influenced by its source and its nature.
Required:
A. Define these terms: reliability of evidence, persuasiveness of evidence, and relevance of evidence.
B. Arrange the following people as sources of information from most reliable to least reliable and explain your reasoning:
1 new company employee,
2 company employee with five years' experience,
3 company lawyer,
4 internal auditor,
5 external auditor,
6 auditor's lawyer,
7 banker,
8 top management,
9 board of directors,
10 company supplier,
11 company customer.
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P=.60 n=19 A. Find the probability that at least 15 of the 19 do not know what effect the law will have on their corporate tax liabilities. B. Find the probability that no more than 10 do not know what effect the law will have.
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