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:

Decertification

The process of revoking or withdrawing the certification of an individual, organization, or product, often in a legal or professional context.

Public Sector

The portion of an economy that comprises government services and enterprises, including administration, defense, public education, and healthcare.

Private Sector

The part of the economy that is owned and managed by private individuals and companies, rather than by the state, and operates for profit.

Labour Relations

The study and practice of managing the relationship between employers and employees, particularly around issues such as wages, working conditions, and collective bargaining.