The two primary forms of audit evidence used during the risk assessment phase are:
A)Inquiry and analysis
B)Inspection and observation
C)Confirmation and analysis
D)Inquiry and recalculation/reperformance

Question

Quizplus · Accepted Answer

During the risk assessment phase, auditors typically gather evidence through inquiries of management and analytical procedures. Inquiries involve asking questions and seeking explanations from management or other relevant parties. Analytical procedures involve comparing financial information to expected results and investigating significant differences. These two methods of obtaining evidence are most applicable during the risk assessment phase, as they allow auditors to gain a broad understanding of the organization and its operations. Inspection and observation, confirmation, and recalculation/reperformance are more commonly used during the substantive testing phase, when the auditor is focused on obtaining more specific evidence to support the financial statements.

The Two Primary Forms of Audit Evidence Used During the Risk