Which of the Following Examples of Audit Evidence Is the Most

question 36

Multiple Choice

Which of the following examples of audit evidence is the most persuasive?

• A) Real estate deeds, which were properly recorded with a government agency.
• B) Canceled checks written by the treasurer and returned from a bank.
• C) Time cards for employees, which are stored by a manager.
• D) Vendor invoices filed by the accounting department.

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Definitions:

Common Stock

Equity ownership in a corporation, with voting rights and potential dividends.

Initial Value Method

An accounting method for investments where the investment is recorded and maintained at its original cost without adjustment for changes in market value.

Common Stock

Equity ownership in a corporation, giving holders voting rights and a share in the company's profits via dividends.

Equity Method

An accounting technique used to assess the profits earned by investments in other companies, where the investment income is proportional to the ownership stake.