Audit evidence concerning proper segregation of duties ordinarily is best obtained by
A) Preparation of a flowchart of duties performed by available personnel.
B) Inquiring whether control activities operated consistently throughout the period.
C) Reviewing job descriptions prepared by the Personnel Department.
D) Direct personal observation of the employees who apply control activities.

Question

Quizplus · Accepted Answer

Direct personal observation of the employees who apply control activities provides the auditor with the best audit evidence concerning proper segregation of duties. This is because the auditor can observe the employees performing their assigned duties and examine whether they have adequate knowledge and competence in their respective jobs. This helps the auditor ascertain whether there is proper segregation of duties to reduce the risk of fraud or error. Other methods such as preparing a flowchart, inquiring whether controls operated consistently or reviewing job descriptions may provide some evidence, but they may not be sufficient to establish whether proper segregation of duties exists in practice.

Audit Evidence Concerning Proper Segregation of Duties Ordinarily Is Best