Question

Determine which of the following is most correct regarding the reliability of audit evidence.

A) Information that is indirectly obtained from external sources is the most reliable audit evidence.
B) Reliability of audit evidence is dependent upon the evidence being convincing.
C) Reliability of evidence refers to the amount of evidence obtained.
D) An effective internal control system provides more reliable audit evidence.

Answer 1

The most correct option regarding the reliability of audit evidence is option B) Reliability of audit evidence is dependent upon the evidence being convincing.

Step-by-step explanation:

The most correct option regarding the reliability of audit evidence is option B) Reliability of audit evidence is dependent upon the evidence being convincing. Audit evidence should be convincing and provide a reasonable basis for the auditor to form an opinion on the financial statements of a company. This means that the evidence should be relevant, reliable, and sufficient to support the conclusions made by the auditor.

Option A is not necessarily true because the reliability of audit evidence does not solely depend on its source. Option C is incorrect because reliability of evidence refers to the quality and persuasiveness of the evidence, not the amount of evidence obtained. Option D is not always true because while an effective internal control system can enhance the reliability of audit evidence, it is not the sole determinant of reliability.