Which of the following statements relating to the appropriateness of audit evidence is always true?
A) Evidence gathered by an auditor from outside an entity is reliable.
B) Accounting data developed under a satisfactory internal control are more relevant than data developed under unsatisfactory internal control conditions.
C) Oral representations made by management are not valid evidence.
D) Evidence gathered by auditors must be both reliable and relevant to be considered appropriate.

Question

Quizplus · Accepted Answer

This statement is always true as audit evidence must be both reliable and relevant to be considered appropriate. Reliability means that the evidence can be trusted and is free from bias while relevance means that the evidence is directly related to the audit objective being tested. Evidence gathered from outside an entity may not always be reliable, accounting data developed under unsatisfactory internal control may still be relevant, and oral representations made by management may be valid evidence in certain cases.

Which of the Following Statements Relating to the Appropriateness of Audit