Which of the following presumptions is correct about the reliability of audit evidence?
A)Information obtained indirectly from outside sources is the most reliable audit evidence.
B)To be reliable, audit evidence should be convincing rather than persuasive.
C)Reliability of audit evidence refers to the amount of corroborative evidence obtained.
D)An effective internal control system provides more reliable audit evidence than does an ineffective internal control system.

Question

Quizplus · Accepted Answer

An effective internal control system provides more reliable audit evidence than does an ineffective internal control system. This is because a strong internal control system reduces the risk of material misstatement, and thus the evidence obtained from such a system is more reliable. Option A is incorrect because information obtained indirectly from outside sources is less reliable than direct evidence obtained from the entity being audited. Option B is incorrect because persuasiveness is a component of convincingness, and both are important qualities of reliable audit evidence. Option C is incorrect because reliability of audit evidence does not refer to the amount of corroborative evidence obtained but rather to its quality, relevance, and sufficiency.

Which of the Following Presumptions Is Correct About the Reliability