Distinguish between: Internal audit evidence and external audit evidence.

Auditing and Assurance Revision Questions and Answers

Answer
Internal audit evidence:
Evidence which originates within the organization being audited is internal evidence. Examples: Sales invoice, copies of sales challan and forwarding notes, goods received note, inspection report, copies of cash memo, debit and credit notes, etc.

External audit evidence:
Evidence that originate outside the client‟s organization for example purchase invoice, supplier‟s challan and forwarding note, debit notes and credit notes coming from parties, quotations, confirmations, etc.

The external evidence is generally considered more reliable as they come from third parties who are not normally interested in manipulation of the accounting information of others. As an ordinary rule the auditor should try to match internal and external evidence as far as practicable. Where external evidence is readily available to match, the auditor should see to what extend the various internal evidence corroborate each other.



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