Which of the Following Statements Is Generally Correct About the Appropriateness

question 95

Multiple Choice

Which of the following statements is generally correct about the appropriateness of audit evidence?

• A) Auditors' direct personal knowledge obtained through observation and inspection is more persuasive than information obtained indirectly from independent outside sources.
• B) To be reliable, audit evidence must be either valid or relevant but need not be both.
• C) Client accounting data alone may be considered sufficient appropriate audit evidence to issue an unqualified opinion on client financial statements.
• D) Appropriateness of audit evidence refers to the amount of corroborative evidence to be obtained.

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Definitions:

Lower-Of-Cost

An accounting method that values inventory at the lower of its historical cost or current market value.

Market Basis

Market Basis refers to the approach of valuing assets or securities at their current market prices instead of their cost prices or intrinsic values.

Inventory Valuation

The process of determining the monetary amount associated with the inventory at hand, often using methods such as FIFO, LIFO, or weighted average cost.

Market Decline

A decrease in stock prices or the value of a particular market segment, often signaling a period of investor pessimism or economic downturn.