Determine Which of the Following Is Most Correct Regarding the Reliability

question 47

Multiple Choice

Determine which of the following is most correct regarding the reliability of audit evidence.

• A) Information that is indirectly obtained from external sources is the most reliable audit evidence.
• B) Reliability of audit evidence is dependent upon the evidence being convincing.
• C) Reliability of evidence refers to the amount of evidence obtained.
• D) An effective internal control system provides more reliable audit evidence.

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Definitions:

Accrue

The process of recognizing revenue or expenses that have been earned or incurred but not yet officially recorded or received in cash.

Total Liabilities

The sum of all financial obligations or debts a company owes, including both short-term and long-term liabilities.

Incurred Expense

Expenses that have been recognized in the accounting period in which they are incurred, regardless of when the payment is made.

Adjusting Process

An analysis and updating of the accounts when financial statements are prepared.