Which of the Following Statements Concerning Audit Evidence Is Correct

question 86

Multiple Choice

Which of the following statements concerning audit evidence is correct?

• A)Appropriate evidence supporting management's assertions should be convincing rather than persuasive.
• B)Effective internal controls contribute little to the reliability of the evidence created within the entity.
• C)The cost of obtaining evidence is not an important consideration to an auditor in deciding what evidence should be obtained.
• D)A company's accounting data cannot be considered sufficient audit evidence to support the financial statements.

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Definitions:

Primary Market Transaction

Occurs when new securities are sold for the first time to investors, directly impacting the issuing company's capital.

Issuing Corporation

The entity that offers securities for sale to investors, typically through the process of a public offering.

Secondary Market

A venue where investors buy and sell securities they already own, such as the stock market, separate from the primary market where securities are first issued.

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation, a creditor relationship with a governmental body or a corporation, or rights to ownership as represented by an option.