Determine Which of the Following Is the Most Correct Statement

question 141

Multiple Choice

Determine which of the following is the most correct statement regarding the reliability of audit evidence.

• A) Information that is indirectly obtained from external sources is the most reliable audit evidence.
• B) Reliability of audit evidence is dependent upon the evidence being subjective.
• C) Reliability of evidence refers to the amount of evidence obtained.
• D) If internal controls are effective, evidence obtained is more reliable than when the controls are not effective.

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Definitions:

Accounting Record

Documented evidence of financial transactions, used to track, report, and audit financial movements.

Short-term Speculation

The practice of buying and selling securities, commodities, or other financial instruments with the aim of profiting from price fluctuations over a short period.

Purchase

This term relates to the process of acquiring goods or services in exchange for money, encompassing a wide range of consumer and business transactions.

Unrealized Loss

A loss that results from holding onto an asset that has decreased in price, not yet realized through selling.