Which One of the Following Would Be the Least Reliable

question 36

Multiple Choice

Which one of the following would be the least reliable type of evidence?

• A)Confirmations returned by bank directly to the auditor.
• B)Letters of communication from the Securities Exchange Commission.
• C)Physical examination of perpetual inventory.
• D)Evidence from an easily overridden information system.

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Definitions:

Annual Return

Refers to the percentage change in an investment's value over a one-year period, including dividends and interest.

Market Rate

The current price or cost of goods, services, or financial assets in a competitive marketplace, often subject to fluctuations.

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment, accounting for the time value of money.

Payback

A capital budgeting method that calculates the time needed to recoup the cost of an investment, based on its expected cash flows.