A major insurance company provides a discount on automobile insurance if the vehicle meets certain safety criteria. Which of the following audit tests would provide an internal auditor with the best evidence that all qualifying insured automobiles are receiving the discount?
To determine if all qualifying insured automobiles are receiving the discount, selecting a sample of automobiles that are not receiving the discount and determining if they have been properly excluded provides direct evidence. This method ensures that no qualifying vehicle is omitted from the discount, which directly answers the question of whether all qualifying vehicles are receiving the discount.
I think D is the correct answer
The objective is to assess that "qualifying insured automobiles are receiving the discount" not "the correct criteria is followed when applying the discount", one has to therefore select a sample of those that did not receive the discount to confirm that these actually did not qualify for one