ACC 490 Week 2 DQ 2

Response #1

Relative competence of evidence has to do with the measure of evidence’s quality (reliability). Evidence must be relevant to the assertion to be considered competent. Put differently, evidence must have logical precise relevance to management’s assertions in the financial statements. In regard to reliability, evidence must be considered worthy of trust. Trustworthiness may be hard to determine from external sources if the source is not alert and fully informed. On the other hand, external sources can be more reliable some times as well, such as in the case of bank statements compared to documents provided by management.  In the role of internal control with respect to internal evidence, such evidence produce by a client’s data processing system would be considered less reliable evidence if internal control were considered ineffective. On the contrary, if internal control operates effectively then the data would be considered more reliable evidence. In the relative persuasiveness of auditor observation evidence, persuasive evidence is less reliable...there is a higher risk of material misstatement when persuasive
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