Evidence Can Be Obtained from Others or Provided by the Auditor

question 61

Multiple Choice

Evidence can be obtained from others or provided by the auditor who has good knowledge of each industry but is not an expert.Which of the following types of evidence is considered to be most reliable?

• A)examination of diamond inventory by the auditor
• B)external confirmations from individual owners of condominium units
• C)examination of oil and gas reserves by the auditor
• D)external confirmations from financial institutions

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Definitions:

Market Price

The ongoing price level for buying or selling an asset or service in the open market.

Market Output

The total quantity of goods and services produced and offered for sale in a market.

External Benefits

Positive effects experienced by third parties as a result of an economic transaction not directly involved.

Efficient Outcome

A situation in which no individual can be made better off without making someone else worse off, typically referring to an optimal allocation of resources.