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T. For each situation presented below, indicate which means of gathering evi indicate a reason from the followi A. Independent source of the information (Independence of provider) B. Auditor's direct knowledge C. Effectiveness of the client's Internal D. Knowledgeable source (qualifications of indi 2 providing the information): and E. Degree of objectivity or Subjectivity of the account 2 DO NOT DISCUSS your answer. CHOOSE ONLY ONE LETTER Answers ItemNumber more reliable Letter for a. The auditor 1. relies on an analysis prepared by the controller of gross margin to sales for t periods; or 2. The auditor calculates gross margin to sales and compa he current and prior res to similar data for prior periods b. In testing accounts receivable for existence, (1) An accounts receivable confirmation is sent to customers, requesting that the return letter be sent back directly to the auditors; or (2) The auditor looks at customer balances in the company's records. 5 c. The auditor reviews evidence to consider the measurement amounts (basis) for two accounts: (1) the cost of land acquired; or, (2) the estimate of bad debts expense. d. Auditor tests two segments of the company. 1. In the first segment, the auditor notices people are assigned to check the work of other employees; or (2) In the second segment, no one bothers to check others' work. 2

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