For Audit Evidence to Be Compelling to the Auditor It

question 69

Multiple Choice

For audit evidence to be compelling to the auditor it must be sufficient and appropriate. Which statement below is not correct regarding the appropriateness of audit evidence?

• A) The more effective the internal control system, the more assurance it provides the auditor about the reliability of financial reporting by the client.
• B) An auditor's opinion, to be economically useful and profitable to the auditing firm needs to be formed within a reasonable time and based on evidence obtained that assures profits for the auditing firm.
• C) Evidence obtained from independent sources outside the entity is generally more reliable than evidence secured solely within the entity.
• D) The independent auditor's direct personal knowledge, obtained through inquiry, observation and inspection, is generally more persuasive than information obtained indirectly.

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Definitions:

Grievances

Complaints or concerns raised by employees regarding workplace issues such as unfair treatment, working conditions, or company policies.

Unfair Labor Practice Strikes

Strikes initiated by workers in response to employers' illegal actions or violations of labor laws, focusing on rights and fair treatment.

Economic Strike

A work stoppage conducted by employees to demand higher wages, better benefits, or improved working conditions from their employer.

Recognition Strike

A type of strike aiming to compel an employer to recognize and negotiate with the union as the official collective bargaining agent for the workers.