Sources Of Audit Evidence:-Difference Between Internal And External Evidence

Append below are some notes pertaining the two sources of audit evidences:


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.





Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.