Which of the Following Statements Describes an Appropriate Relationship with Respect

question 8

Multiple Choice

Which of the following statements describes an appropriate relationship with respect to the reliability of audit evidence?

• A)Receiving confirmation from third parties as to the existence of securities is more reliable than the auditors' personal inspection of those securities.
• B)Verbal inquiries received from the client regarding sales made to customers are more reliable than sales invoices prepared by the client for its customers.
• C)A bank confirmation received directly by the auditor is more reliable than a bank confirmation initially received by the client and forwarded to the auditor.
• D)Evidence drawn from a document prepared by the client is more reliable than evidence drawn from a document prepared by an external party that is forwarded to the auditor by the client.

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Definitions:

New Product

refers to a good or service recently developed or introduced to the market that fulfills a newly identified or existing customer need.

Rent Control

Government-imposed limits on the amount landlords can charge for renting out their property, often to make housing more affordable.

Tying

A sales strategy where the sale of one product (the tying product) is linked to the purchase of a second distinct product (the tied product).

High Demand

A situation in which the desire for a product or service significantly outweighs the supply available in the market.