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Exam AUD topic 1 question 732 discussion

Actual exam question from AICPA's AUD
Question #: 732
Topic #: 1
[All AUD Questions]

Which of the following statements concerning audit evidence is correct?

  • A. Reliable evidence supporting management's assertions should be conclusive rather than merely persuasive.
  • B. An effective internal control structure contributes little to the reliability of the evidence created within the entity.
  • C. The cost of obtaining evidence is not an important consideration to an auditor in deciding what evidence should be obtained.
  • D. A client's accounting data cannot be considered sufficient audit evidence to support the financial statements.
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Suggested Answer: D 🗳️
Choice "D" is correct. Audit evidence consists of the underlying accounting data and all corroborating information available to the auditor. A client's accounting data by itself is not considered sufficient audit evidence to support the financial statements.
Choice "A" is incorrect. Reliable evidence supporting management's assertions only needs to be corroborative or persuasive, not conclusive.
Choice "B" is incorrect. An effective internal control structure contributes greatly to the reliability of the evidence created within the entity.
Choice "C" is incorrect. The cost of obtaining evidence is an important consideration to an auditor in selecting appropriate audit procedures. The cost of a procedure may be a valid reason for omitting that procedure, as long as an appropriate alternative procedure is available.
by gemazyni at April 5, 2025, 5:03 p.m.

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