Which of the following statements relating to the appropriateness of audit evidence is always true?
A)Evidence gathered by an auditor from outside an entity is reliable.
B)Accounting data developed under a satisfactory internal control system are more relevant than data developed under unsatisfactory internal control conditions.
C)Oral representations made by management are not valid evidence.
D)Evidence gathered by auditors must be both reliable and relevant to be considered appropriate.

Question

Quizplus · Accepted Answer

Both reliability and relevance are important factors in determining the appropriateness of audit evidence. Reliable evidence is dependable and accurate, while relevant evidence is directly related to the specific audit objective being tested. Therefore, evidence must meet both criteria to be considered appropriate for use in the audit. Choices A and B are not always true, as evidence gathered from external sources may not always be reliable, and accounting data developed under satisfactory internal control conditions may still be irrelevant to the audit objective. Choice C is also not always true, as oral representations made by management may be considered valid evidence in certain circumstances.

Which of the Following Statements Relating to the Appropriateness of Audit