Distinguish between the Internal evidence and external evidence

Auditing and Assurance Revision Questions and Answers

Answer
Internal evidences are those evidences which are supposed to be generated or available within the entity under audit. Examples of internal evidences are bills, receipts, invoices, debit/credit notes, pay sheets, bank statements etc.
Auditor‟s reliance on the internal evidence depends upon his assessment of the related internal controls.
External evidences are evidences obtained from sources which are independent of the entity under audit. Examples of external evidences are confirmation from debtors/creditors, confirmation of stock lying with the third party etc.
External evidences are generally more reliable than internal evidences. Some time it may be difficult to obtain external evidence in that case the auditor should look for appropriate



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