Final answer:
The audit procedure of sending confirmation letters to third parties who hold the client's inventory is characterized by Inspection of Documents as the type of audit evidence, which satisfies the balance-related audit objectives of Completeness and Accuracy.
Step-by-step explanation:
When conducting an audit, auditors perform various procedures to gather sufficient and appropriate evidence to form an opinion on the financial statements. One such procedure is sending letters directly to third parties who hold the client's inventory, asking them to respond directly to the auditors, also known as confirmation. In this case, the type of audit evidence used is Inspection of Documents. This evidence supports the balance-related audit objectives of Completeness and Accuracy. Confirming inventory holdings directly with third parties provides evidence that all inventory that should be recorded has been (Completeness) and that inventory amounts are accurate (Accuracy).