Question

2.32 The most reliable evidence regarding the existence of newly-acquired computer equipment is:

a. inquiry of management
b. documentation prepared externally
c. evaluation of the client's procedures
d. physical observation

Answer 1

Physical observation is the most reliable method to confirm the existence of newly-acquired computer equipment, providing direct and tangible proof over other methods like management inquiries or external documentation.

Step-by-step explanation:

The most reliable evidence regarding the existence of newly-acquired computer equipment is physical observation. This involves a direct, physical observation of the new equipment, which allows auditors or relevant personnel to verify the presence and condition of the equipment firsthand. In comparison to other methods like management inquiry, which relies on verbal assurances, or documentation that can be erroneous or incomplete, physical observation provides tangible proof that the asset exists and can be inspected for its state and relevance. Hence, this method is most aligned with primary source evidence, which is the raw information gathered for analysis to make a credible evaluation of an asset like computer equipment