Which of the Following Types of Documentary Evidence Should the Auditor

question 3

Multiple Choice

Which of the following types of documentary evidence should the auditor consider to be the most reliable?

• A)A sales invoice issued by the entity and supported by a delivery receipt from an outside trucker.
• B)Confirmation of an account payable balance mailed by and returned directly to the auditor.
• C)A check issued by the company and bearing the payee's endorsement that is included with the bank statement mailed directly to the auditor.
• D)A working paper prepared by the entity's controller and reviewed by the entity's treasurer.

---

Definitions:

Two-tailed Test

A two-tailed statistical hypothesis test that examines if a sample falls outside a specific range of values, testing for both exceeding and falling short of this range.

Expected Value

The mean value of a random variable, computed by multiplying each possible value by its probability and summing up these products.

Test Statistic

A value calculated from sample data during a hypothesis test used to determine the likelihood of the null hypothesis being true.

Critical Value(s)

The thresholds in statistical hypothesis testing that define the boundary or boundaries for rejecting the null hypothesis.