Final answer:
The false statement about audit evidence reliability is that a copy of a document is as reliable as the original. Auditors must assess evidence carefully, considering source, nature, and internal controls. Direct personal knowledge is usually more reliable than indirect information.
Step-by-step explanation:
The false statement about the reliability of audit evidence is that a copy of a document is as reliable as the original. This is not necessarily true because copies can be tampered with more easily than originals, and they do not carry the same legal weight. It's important for auditors to assess the reliability of evidence when conducting an audit.
When considering the reliability of audit evidence, an auditor should take into account the source of the evidence and its nature. Evidence obtained from independent sources outside the organization is typically more reliable because it is less likely to be subject to the same biases or errors as internal documentation. Furthermore, the internal controls in place within an organization will greatly affect the reliability of the accounting data. Well-designed and effectively operated internal controls can provide reasonable assurance about the reliability of financial reporting.
The auditor's direct personal knowledge, obtained through observation, inspection, and inquiry, is generally considered more reliable than information obtained indirectly. Testimony from others, or secondary information, always carries a risk of distortion or misunderstanding. However, the auditor must weigh all available evidence, considering factors such as the authority and credibility of the source, the conditions under which it is generated, and its consistency with other evidence.