Append below are some notes pertaining the two sources of audit evidences:
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Internal Evidence
- Created and used and retained within the client’s organization and without its generally going to outside party.
- Examples: sales invoices duplicate copy, employees’ time reports, inventory reports, counterfoils of receipts, purchase requisitions
- May not constitute a direct accounting source document
External Evidence:
- Originate outside the client’s organization.
- Examples: Bank Statement, Supplier Invoice, Insurance policies,etc
- These documents generally prepared in the ordinary course of business activities and form part of its records whether of accounting or non-accounting nature.
- Sometimes obtained directly from source like bank,debtors and creditors confirmations
Salient Points:
Basic difference between internal and external audit evidence is with reference to their origin.
Also external evidence is consider more reliable than internal evidence.
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