Certified Government Auditing Professional (CGAP) Practice Exam

Which document represents physical evidence in an auditing context?

1. A formal letter documenting changes

2. Interview summary from a client

3. Audit observation logs

4. Invoices and contracts

The correct answer is: A formal letter documenting changes

In the context of auditing, physical evidence refers to documents or records that provide tangible proof of transactions, activities, or obligations. Invoices and contracts are prime examples of such documents, as they contain specific details regarding financial transactions and agreements between parties. They serve as formal records that can be verified and are essential for substantiating the financial statements being audited. Formal letters documenting changes could provide communication and reasoning but do not represent the tangible evidence of a transaction or activity. Interview summaries and audit observation logs capture understandings and findings from discussions and observations but do not serve as direct evidence of transactions or obligations. In contrast, invoices and contracts can be reviewed against transactions to confirm their validity and are therefore the correct representation of physical evidence in an auditing context.