Which of the following would provide the best form of evidential matter pertaining to the annual valuation of a long-term investment in which the independent auditor's client owns a 45 percent voting interest?

Question

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The audited financial statements of the investee company would provide the most reliable and relevant evidence regarding the annual valuation of the long-term investment. This is because the audited financial statements are prepared in accordance with generally accepted accounting principles (GAAP) and are subject to an independent auditor's opinion. The market quotations of the investee company's stock could fluctuate and may not necessarily reflect the true value of the investment. The current fair value of the investee company's assets would also not necessarily give a complete picture of the investee company's financial health. The historical costs of the investee company's assets are irrelevant to their current value.

Which of the Following Would Provide the Best Form of Evidential