The Following Statements Were Made in a Discussion of Audit

question 69

Multiple Choice

The following statements were made in a discussion of audit evidence between two CPAs.Which statement is not valid concerning audit evidence?

• A) "I am seldom convinced beyond all doubt with respect to all aspects of the statements being examined."
• B) "I would not undertake that procedure because at best the results would only be persuasive and I'm looking for convincing evidence."
• C) "I evaluate the degree of risk involved in deciding the kind of evidence I will gather."
• D) "I evaluate the usefulness of the evidence I can obtain against the cost of obtaining it."

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Definitions:

Diminishing Returns

A rule that asserts when one input in the production process is augmented without changes to the others, there will ultimately be a decline in output after reaching a specific level.

Average Fixed Cost

The cost per unit that remains constant regardless of the level of production or output.

Output

The total amount of goods or services produced by a company or economy.

Total Cost

The total expense incurred in the production of goods or services, including both fixed and variable costs.