Which of the Following Statements Is Not a Correct Use

question 35

Multiple Choice

Which of the following statements is not a correct use of the terminology in relation to audit evidence?

• A) Evidence obtained from an independent source outside the client organization is more reliable than that obtained from within.
• B) Documentary evidence is more reliable when it is received by the auditor indirectly rather than directly.
• C) Documents that originate outside the company are considered more reliable than those that originate within the client's organization.
• D) External evidence, such as communications from banks, is generally regarded as more reliable than answers obtained from inquiries of the client.

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Definitions:

Exchange Rates

The pace at which one form of money can be traded for another, impacting worldwide commerce and investment activities.

Balance Sheet

A financial statement that presents a company's assets, liabilities, and shareholders' equity at a specific point in time, providing insights into its financial position.

Inventory

Goods and materials that a business holds for the ultimate goal of resale or production.

Perpetual Inventory System

A method of accounting for inventory that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.