For audit evidence to be compelling to the auditor it must be sufficient and appropriate. Which statement below is not correct regarding the appropriateness of audit evidence?
A) The more effective the internal control system, the more assurance it provides the auditor about the reliability of financial reporting by the client.
B) An auditor's opinion, to be economically useful and profitable to the auditing firm needs to be formed within a reasonable time and based on evidence obtained that assures profits for the auditing firm.
C) Evidence obtained from independent sources outside the entity is generally more reliable than evidence secured solely within the entity.
D) The independent auditor's direct personal knowledge, obtained through inquiry, observation and inspection, is generally more persuasive than information obtained indirectly.

Question

Quizplus · Accepted Answer

This statement is not correct as the appropriateness of audit evidence is not dependent on whether it is economically useful or profitable for the auditing firm. The auditor's main objective is to obtain sufficient and appropriate evidence to support their opinion on the financial statements, regardless of the economic benefit to the auditing firm.

For Audit Evidence to Be Compelling to the Auditor It