1 2 Week 4 Evidence and Standards ACC/491 4/20/20Week 4 Evidence and Standards Comparison of Audit, Scientific and Legal Evidence Standards. According to "Investopedia" (2020), generally accepted auditing standards (GAAS) are a set of systematic guidelines used by auditors when conducting audits on companies' financial records. GAAS helps to ensure the accuracy, consistency, and verifiability of auditors' actions and reports. The Auditing Standards Board (ASB) of the American Institute of Certified Public Accountants (AICPA) created GAAS. (para 1).   Scientific evidence is information gathered from scientific research, which takes a lot of time to conduct. But there are a few things that all this research needs to have in common to make it possible for businesses to accept it as "evidence" ("The Conversation," 2020).  Legal evidence is represented by what is lawful to be proven by law to be valid or invalid, true or untrue. Consideration of Sample Sizes and Methods (random, haphazard, monetary unit sample, judgmental) and how sampling affects evidence. Evidence gathered should be representative of the population. The chances that the sample taken is not representative of the population is sampling risk, which should be controlled by using proper sample size and appropriate selection. (Arens, Elder, & Beasley, 2014, p. 476) The selection of a sample is made using the following methods: random, haphazard, monetary unit, and judgmental. Random sample selection is made by giving all items in a population the same chance of being selected. Sample selection is used when there is no need to emphasize some items in the population. (Arens, Elder, & Beasley, 2014, p. 478) Haphazard sample selection is made without any distinguishing characteristics such as size or source. (Arens, Elder, & Beasley, 2014, p. 480) Monetary unit sampling is a statistical method used for testing details of balances. Samples are selected based on the probability proportional to size sample selection. (Arens, Elder, & Beasley, 2014, pp. 566-567) Judgmental sampling is based on the auditor's decision on which items from the population to review. It's based on auditor's knowledge of the business and industry, as well as their experience in auditing.  Relevance, Reliability and Sufficiency of Evidence. Our company's control over financial reporting is a process that's designed to assure the reliability of financial reporting and the preparation of financial statements for external purposes under generally accepted accounting principles. Management is responsible for establishing and maintaining internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). They assess the effectiveness of the internal control over financial reporting based on the criteria that were set forth in the Internal Control-Integrated Framework that was issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Managem.

1. 1
2
Week 4 Evidence and Standards ACC/491
4/20/20Week 4 Evidence and Standards
Comparison of Audit, Scientific and Legal Evidence Standards.
According to "Investopedia" (2020), generally accepted auditing
standards (GAAS) are a set of systematic guidelines used by
auditors when conducting audits on companies' financial
records. GAAS helps to ensure the accuracy, consistency, and
verifiability of auditors' actions and reports. The Auditing
Standards Board (ASB) of the American Institute of Certified
Public Accountants (AICPA) created GAAS. (para 1).
Scientific evidence is information gathered from scientific
research, which takes a lot of time to conduct. But there are a
few things that all this research needs to have in common to
make it possible for businesses to accept it as "evidence" ("The
Conversation," 2020).
Legal evidence is represented by what is lawful to be proven by
law to be valid or invalid, true or untrue.
Consideration of Sample Sizes and Methods (random,
haphazard, monetary unit sample, judgmental) and how
sampling affects evidence.
Evidence gathered should be representative of the population.
The chances that the sample taken is not representative of the
population is sampling risk, which should be controlled by
using proper sample size and appropriate selection. (Arens,
Elder, & Beasley, 2014, p. 476)
The selection of a sample is made using the following methods:

2. random, haphazard, monetary unit, and judgmental.
Random sample selection is made by giving all items in a
population the same chance of being selected. Sample selection
is used when there is no need to emphasize some items in the
population. (Arens, Elder, & Beasley, 2014, p. 478)
Haphazard sample selection is made without any distinguishing
characteristics such as size or source. (Arens, Elder, & Beasley,
2014, p. 480)
Monetary unit sampling is a statistical method used for testing
details of balances. Samples are selected based on the
probability proportional to size sample selection. (Arens, Elder,
& Beasley, 2014, pp. 566-567)
Judgmental sampling is based on the auditor's decision on which
items from the population to review. It's based on auditor's
knowledge of the business and industry, as well as their
experience in auditing.
Relevance, Reliability and Sufficiency of Evidence.
Our company's control over financial reporting is a process
that's designed to assure the reliability of financial reporting
and the preparation of financial statements for external purposes
under generally accepted accounting principles. Management is
responsible for establishing and maintaining internal control
over financial reporting (as defined in Rule 13a-15(f) under the
Exchange Act). They assess the effectiveness of the internal
control over financial reporting based on the criteria that were
set forth in the Internal Control-Integrated Framework that was
issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework). Management knows
that the internal control over financial reporting was effective
December 31, 2019, to assure the reliability of financial
reporting and the preparation of financial statements by

3. following the U.S GAAP. We take on positive and negative
available evidence, including levels of income, expectations,
and risks that are associated with estimates of new taxable
income and ongoing tax planning strategies in assessing the
need for a valuation allowance. With the participation of the
chief executive officer (CEO) and chief financial officer (CFO),
has evaluated the effectiveness of our disclosure controls and
procedures (as defined in Rules 13a- 15(e) and 15d- 15(e) under
the Securities Exchange Act of 1934, as amended (Exchange
Act)), as of the end of the period covered by this Annual Report
on Form 10-K.
The CEO and CFO have concluded that as of December 31,
2019, they were able to disclosure controls and procedures, they
are designed at a reasonable assurance level. They are effective
to provide reasonable assurance. The information required to
disclose in reports that they filed or submitted under the
Exchange Act is recorded, processed, summarized, and reported
within the time frame specified in the rules and forms of the
Securities and Exchange Commission (SEC) and that this
information is accumulated as well communicated to
management. There are limitations on the Effectiveness of
Controls and Procedures and Internal Control over Financial
Reporting. In designing and evaluating the disclosure controls
and procedures and internal control over financial reporting,
management recognizes that any controls and procedures, even
how well designed and operated, can still provide reasonable
assurance of achieving the desired control objectives. In the
end, the design of disclosure controls and procedures and
internal control over financial reporting have to be able to
reflect the fact that there are resource constraints and that
management must apply judgment in evaluating the benefits of
possible controls and procedures relative to their costs. The
reputation and ability to attract, retain, and serve users is
dependent upon the reliable performance of the products and the
underlying technical infrastructure. If products are unavailable

4. when users attempt to access them, do not load as quickly as
expected. Users may not use the products as often in the future
or at all, and the ability to serve ads may be disrupted, which
can affect business and financial performance.
Brief statement on the 80 types of Audit evidence
Evidence is what helps an auditor decide whether the financial
statements are fairly presented with internal controls having a
significant influence on the reliability of most kinds of
evidence. The most expensive types of evidence are physical
examination and confirmation, and the lease expensive are
observation, inquiry, and recalculation. Of the 80 types of audit
evidence, the following are the most common:
Inspection is the auditor's examination of the client's documents
and records to substantiate the information that is, or should be,
included in the financial statements.
Physical examination is the inspection or count by the auditor
of a tangible asset, most often associated with inventory and
fixed assets.
Confirmation is receiving a direct written response from a third
party verifying the accuracy of the information that was
requested by the auditor.
Observation consists of looking at a process or procedure being
performed by others.
An inquiry is obtaining written or oral information from the
client in response to questions from the auditor, inquiry often
requires corroborating evidence.
Recalculation is the rechecking of a sample of calculations.
Purpose, ownership, confidentiality, and retention
documentation

5. The purpose of audit documentation is for the auditor to
have the information of the audit performed with detailed
documentation, which could hold information that pertains to
internal controls and the evidence collected. Also, the
documentation could help to determine if there is enough
evidence for them to make sure that the company is following
the auditing standards. Ownership is the property of the auditor.
When it comes to any documentation of the audit and any
schedules prepared by the client and given to the auditor, the
only time documentation can be given to another person is if it
is subpoenaed into court. When it comes to confidentiality, they
must follow Rule 301 of the Code of Professional Conduct that
states that they cannot disclose any confidential information
that they collect during the auditing process unless the client
consents to it first. So, they must make sure that they have a
safe ground in place to prevent the information from getting
out. According to the auditing standards, they must keep the
documents that they collect for private companies for five years
and public companies for seven years. Or they could be charged
criminally if the documents are not held for the seven years.
References
Arens, A. A., Elder, R. J., & Beasley, M. S. (2014). Auditing
and Assurance Services: An Integrated Approach. Boston, MA:
Pearson.
Arens, A. A., Elder, R. J., & Beasley, M. S. (2014). Auditing
and assurance services: An integrated approach (15th ed.).
Upper Saddle River, NJ: Pearson.
Investopedia(2020). Retrieved from
https://www.investopedia.com/terms/g/gaas.asp
The conversation(2020). Retrieved from
https://theconversation.com/scientific-evidence-what-is-it-and-
how-can-we-trust-it-14716