Which of the Following Types of Documentary Evidence Should the Auditor

question 57

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 client 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 client's controller and reviewed by the client's treasurer.

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Definitions:

Carrying Cost

The total cost of holding inventory, including storage, insurance, depreciation, and opportunity costs, among others.

Order Cost

The expenses associated with placing and receiving orders for inventory, including costs related to processing, shipping, and handling.

Teething Rings

A teething ring is a device designed to soothe babies' gums when their teeth start to grow.