Question 1:


Which of the following assertions is NOT  correct about the reliability of Audit Evidence? 

A. Original documents are more reliable than  photocopies 

B. Evidence in the form of written  representation is more reliable than oral representation 

C. Audit evidence directly obtained from the  entity’s record is more reliable than that  obtained from external source 

D. Audit evidence directly obtained by auditor is  more reliable than that obtained by or from the  entity 

E. Client generated computation is less reliable  than auditors re-performance of the same  


The correct answer is (C)


Past Question Review:

Audit evidence refers to all of the information which an auditor uses to support the audit findings and conclusions and, where required, arrive at an audit opinion. 

The audit team is expected to obtain sufficient, relevant and reliable evidence. 

By sufficiency, we mean the measure of the quantity of audit evidence. Relevancy refers to the ability to answer the audit objective or assertion and reliability relates to its credibility and consistency.

Audit evidence is said to be reliable if it fulfils the necessary requirements for credibility, if the same findings arise when tests are carried out repeatedly or when information is obtained from different sources. The reliability of audit evidence is affected by its source and type and is dependent on the circumstances under which it is obtained. 

While recognising that exceptions may exist, audit evidence is considered more reliable when it is:

  • provided by original documents rather than photocopies or faxes
  • in documentary form, whether paper, electronic, or another medium, rather than verbal statements. 
  • obtained directly by the auditor (e.g. observation of the application of a control, computation) rather than indirectly (e.g. enquiry about the application of a control);
  • obtained from independent sources outside the entity (e.g. confirmation received from a third party), as opposed to being generated within the audited organisation or if the third-party is related to the audited organisation;
  • subject to effective related controls if internally generated, because strong internal controls within the audited organisation can improve the quality of information obtained. 
So the correct answer is (C).

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