Which of the Following Statements Is Not a Correct Statement

question 104

Multiple Choice

Which of the following statements is not a correct statement regarding audit evidence?

• A) Evidence obtained from an independent source outside the client organization is more reliable than that obtained from within.
• B) Documentary evidence is more reliable when it is received by the auditor indirectly rather than directly.
• C) Documents that originate outside the company are considered more reliable than those that originate within the client's organization.
• D) External evidence, such as communications from banks, is generally regarded as more reliable than answers obtained from inquiries of the client.

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Definitions:

Monopoly Power

It is the ability of a single seller or producer to control prices and total market output.

Optimal Output

The level of production that maximizes a firm's profits or minimizes its costs, depending on the context.

Incomplete Information

A situation where all parties in a transaction do not have full knowledge about actions, intentions, or preferences of other parties.

Economic Inefficiencies

Occurrences where resources are not allocated optimally, leading to lost potential output or welfare.