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the question talks anbout information which is output which is reporting
A- perfect answer as it to check that reporting are adequate and effective.
B- is data, which mean input, the question talk about information and output
c-information system that provide management on timely, where ANSWER A talks about effective of the report
D-information system not reporting
I believe the reason for A being the answer is that, option B is only to referring to external requirements (option is completely ruled out), option C is only referring to information being timely, option D is only referring to information being complete. Whereas the reliability of any system can be enhanced through its effectiveness and adequacy (which are also taking care of completeness and timliness of the information)
i have a feeling that it is a black box approach . i.e. if records keeping is effective, the information going into the system would be reliable and thus reporting is deemed reliable too.
The most important words in this question are 1) most effective 2) reliability
Reliability means free from bias and comes from a credible source
A) If controls over record keeping and reporting are adequate and effective then we can rely on the output because it is free from bias to an ascertained extent
B) Compliance with external requirements does not necessarily mean free from bias
C) Timeliness is just a part of reliability for example if an auditor receives the trial balance on time it does not necessarily mean that they should rely on the numbers in there
D) Complete information is sufficient not reliable
Qualities of audit evidence
upvoted 3 times
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