Which option typically serves as the most dependable source of audit evidence?
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Answer: B. Suppliers’ statements
Explanation
Suppliers statements obtained directly represent highly dependable third-party audit evidence. External confirmations minimize the risk of internal manipulation by client staff. Independent corroboration provides strong assurance regarding accounts payable balances. Direct external confirmation is a primary substantive procedure in financial auditing. Suppliers reconcile their records with client accounts, reducing discrepancies. Evidence hierarchy ranks external documents above internal memos and schedules.
Auditors rely on supplier statements to verify the completeness of recorded liabilities. Unreturned confirmations require alternative auditing procedures to gather sufficient evidence. Reliable evidence supports clean audit opinions and protects against litigation risks. Internal audit work is performed within the company and lacks complete external independence. Board minutes document corporate decisions but do not confirm external financial balances. Analytical review provides general oversight rather than direct transaction verification.
- Subject
- Accounting and Finance
- Category
- Auditing
- Topic
- —
- Difficulty
- medium
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