II. For each situation presented below, indicate which means of gathering evidence would be considered more reliable AND indicate a reason from the following list: A. Independent source of the information (Independence of provider); B. Auditor's direct knowledge; C. Effectiveness of the client's Internal Controls. D. Knowledgeable source (qualifications of individuals providing the information); and E. Degree of Objectivity or Subjectivity of the account. DO NOT DISCUSS your answer. CHOOSE ONLY ONE LETTER. Answers Item Number more reliable Letter for reason a. (1) The auditor relies on an analysis prepared by the controller of gross margin to sales for the current and prior periods; or (2) The auditor calculates gross margin to sales and compares to similar data for prior periods. b. In testing accounts receivable for existence, (1) An accounts receivable confirmation is sent to customers, requ the return letter be sent back directly to the auditors; or (2) The auditor looks at customer balances in the company's records. c. In testing assets, (1) the auditor verifies the cost of additions to the "land" account, or (2) the auditor considers the adequacy of the "Allowance for Doubtful Accounts" account. d. Auditor tests two segments of the company. (1). In the first segment, the auditor assesses control risk as .80; or (2) In the second segment, the auditor assesses control risk as .20