Problem
Janice Co. external auditors are currently performing the audit of SunnySide Company, a retailer that specializes in antique furniture. The lead partner assigned to the engagement along with the senior audit managers is discussing the different types of audit evidence that should be collected in order to form an opinion on the financial statements. Which of the following statements made by the staff assigned to this audit are correct with respect to audit evidence? (Several choices may be correct.)
I. Areas, where information is more susceptible to management bias, may be less reliable; we should either collect more evidence in this area and/or attempt to obtain higher-quality evidence.
II. We should use the internal audit staff to collect audit evidence pertaining to areas of higher risk, as they are more familiar with the company than we are.
III. We should not think of the quantity of audit evidence as achieving a certain number or threshold of documents, but rather when the auditor feels as though enough support has been gathered to support a particular assertion.
IV. If we collect enough evidence to support each assertion we want to audit, there will be no problems in issuing a clean audit opinion for this client.