Which of the Following Presumptions Does Not Relate to the Reliability

question 844

Multiple Choice

Which of the following presumptions does not relate to the reliability of audit evidence?

• A) The more effective the internal control structure, the more assurance it provides about the accounting data and financial statements.
• B) An auditor's opinion, to be economically useful, is formed within reasonable time and based on evidence obtained at a reasonable cost.
• C) Evidence obtained from independent sources outside the entity is more persuasive than evidence secured solely within the entity.
• D) The independent auditor's direct personal knowledge, obtained through observation and inspection, is more persuasive than information obtained indirectly.

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Definitions:

Financial Reporting

The activity of formulating pronouncements that illustrate an organization's financial status to its directors, patrons, and the government.

IFRS

IFRS, or International Financial Reporting Standards, are globally accepted standards for accounting that guide how transactions and other accounting events are reported in financial statements.

Financial Accounting Standards Board

An independent organization that establishes financial accounting and reporting standards in the United States.

U.S. Accounting Standards

The accounting principles, standards, and procedures established by the U.S. Financial Accounting Standards Board (FASB) for domestic companies.