Which of the Following Types of Audit Evidence Is the Most

question 65

Multiple Choice

Which of the following types of audit evidence is the most reliable?

• A)evidence from the client's organization.
• B)evidence from a poorly controlled system.
• C)directly observable evidence.
• D)facsimiles of documents.

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Definitions:

Financial Risk

The possibility of losing money on an investment or business venture due to various factors including market fluctuations, interest rate changes, and credit risk.

Efficient Market Theory

A hypothesis stating that financial markets fully incorporate all available information into asset prices at all times.

Interest Rate

The annual percentage rate applied to the outstanding amount of a loan, representing the charge borrowers pay for interest.

Fundamental Value

The intrinsic worth of an asset, determined by its cash flows, dividends, and growth prospects, rather than current market conditions.