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CSS Audit Tax Finance P-II QUESTION #1218
Question 1
Which of the following statements is generally correct about the reliability of audit evidence?
  • To be reliable, evidence should be conclusive rather than persuasive
  • Effective internal control system provides reliable audit evidence✔️
  • Evidence obtained from outside sources routed through the client
  • All of these
Correct Answer Explanation
An effective internal control system reduces the risk of material misstatement, making the audit evidence obtained in a well-controlled environment more reliable. Option (A) is incorrect — audit evidence is generally persuasive, not conclusive. Option (C) is incorrect — evidence from outside sources routed through the client is less reliable than direct external confirmation.