CPA Exam — AUDPerforming Further Procedures and Obtaining EvidenceEasy
An auditor is evaluating the appropriateness of audit evidence obtained during the audit of a private company. Which of the following factors would most significantly impact the persuasiveness of audit evidence?
- AThe cost-benefit of obtaining additional evidence.
- BThe experience level of the audit staff performing the procedures.
- CThe relevance and reliability of the audit evidence.
- DThe quantity of audit evidence obtained.
Show answer & explanationAnswer & explanation
Correct answer: C. The relevance and reliability of the audit evidence.
The persuasiveness of audit evidence is determined by its appropriateness and sufficiency. Appropriateness relates to the quality of audit evidence, which includes its relevance and reliability. Evidence that is both relevant (pertains to the assertion being tested) and reliable (trustworthy) is considered highly persuasive.
Why the other options are wrong
- A. Cost-benefit is a practical consideration for the auditor, but it does not inherently impact the persuasiveness (quality and quantity) of the evidence itself.
- B. Staff experience affects the *efficiency* and *quality of execution* of procedures, but not the inherent persuasiveness of the evidence itself.
- D. Quantity (sufficiency) is important, but without quality (appropriateness), a large quantity of poor evidence is still unpersuasive.
Persuasiveness of Audit Evidence
The degree to which audit evidence provides conviction regarding the truth or falsity of an assertion, determined by its appropriateness (relevance and reliability) and sufficiency (quantity).
- Higher quality evidence is more persuasive.
- Relevance means it addresses the assertion.
- Reliability means it's trustworthy and objective.
- Sufficiency refers to the quantity of evidence.
Memory trick: Relevant and Reliable, that's the evidence you can believe.