Audit Evidence Has Two Primary Qualities for the Auditor; Relevance

question 112

Multiple Choice

Audit evidence has two primary qualities for the auditor; relevance and reliability. Given the choices below, which provides the auditor with the most reliable audit evidence?

• A) general ledger account balances
• B) confirmation of accounts receivable balance received from a customer
• C) internal memo explaining the issuance of a credit memo
• D) copy of month-end adjusting entries

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Definitions:

Excess Capacity

Refers to the situation where a firm or economy can produce more goods or services than currently produced due to available resources not being fully utilized.

Efficiency

The extent to which time, effort, or cost is well used for the intended task or purpose within supply chain processes.

C2C Cycle

The cycle within consumer-to-consumer transactions, from one individual to another, typically facilitated by third-party platforms.

Accounts Payable

The amount of money a company owes to its suppliers or creditors for goods and services purchased on credit.