Question

Classify the following evidential items by source (direct knowledge, external, and so on).

1.Amounts shown on a letter received directly from an independent bond trustee.

2. Amounts obtained from minutes of the board of directors’ meeting.

3. Computation of bond interest and amortization expense when remaining term and status of the bond are audited.

4. Amounts shown on canceled cheques.

Answer 1

1.amouny shown on a letter recieved directly from an independent bond trustee is an external source.

2.amounts obtained from minutes oft he board of directors meeting is inernal source hence consider as a direct knowledge.

3.Computation of bond interest and amortization expense when remaining term and status of the bond are audited is also consider as a direct knowledge beacuse it contain self evaluation by self calculation.

4.amount shown on cancelled cheques is internal source.