Accounting

    The third generally accepted audit standard (GAAS) of field work is interpreted in Statement of Auditing Standards No. 31, Evidential Matter (AU Sec 326) and SAS Nol. 80, Amendment to SAS No. 31 is reproduced below

Sufficient competent evidential matter is to be obtained through inspection, observation inquiries and confirmations to afford a reasonable basis for an opinion regarding the financial statements under audit. (Ricchiute, 2000) 

Of the many types of audit evidences in which one would rely on the most is the type which passed the following criteria (1) auditors direct knowledge, (2) independence and qualification of provider or source, (3) effectiveness and quality of internal control, (Knechel, n.d.) (4) Relevance and objectivity of evidence which went through documentation, physical examination, observation, analytical procedures, re-performance and inquiry. Thus, documents which were externally generated and sent directly to the auditor are the most reliable compared with documents that were internally generated but not externally circulated which has the least reliability.

The generally accepted auditing standards (GAAS), the International Standards of Auditing (ISA) and the common practices of auditors indicate that evidences must at least be persuasive, but convincing incontrovertible evidence in support of an assertion gives more assurance that the evidence is more reliable, especially when these are sourced externally.   

In other words, the best audit evidence is the tangible and physical type which can be inspected, vouched, counted, confirmed, documented externally and verified and tested for mechanical accuracy. A specific example of a strong type of evidence is a cut-off bank statement delivered directly to the auditor. On the other hand, an example of the weakest type is a purchase requisition or a duplicate sales invoice which are simply generated internally and not circulated externally.