Rank the reliability of the following items of audit evidence:
1)a sales invoice issued by the company
2)confirmation of an account receivable balance mailed by and returned directly to the auditor
3)minutes of a board meeting
4)a copy of a signed lease agreement
A) 2, 3, 4, 1
B) 3, 4, 2, 1
C) 2, 4, 1, 3
D) 4, 3, 2, 1

Question

Quizplus · Accepted Answer

Confirmation of an account receivable balance mailed by and returned directly to the auditor is the most reliable form of audit evidence because it is obtained from an independent third party. Minutes of a board meeting are also reliable because they are official records of the company. A copy of a signed lease agreement is less reliable than minutes of a board meeting because it is not an official record of the company. A sales invoice issued by the company is the least reliable form of audit evidence because it is prepared by the company itself.

Rank the Reliability of the Following Items of Audit Evidence