The auditor could obtain audit evidence from many different sources, such as their own testing or external independent sources. The result from their own testing including their reviewing the client’s internal control over financial reporting during the planning stage.

Or through performing audit procedures such as inquiry, observation, inspection, recalculation, re-performance, confirmation as we as an analytical review. Others sources that auditors could obtain audit evidence is the evidence that generates or represent by management.

And one more source that generally considers more reliable than the source that we obtain directly from management is the confirmation from external parties.

For example, bank confirmation, receivable confirmation, and payable confirmation. This evidence is powerful when directly obtaining from the banks, customers, and suppliers.

Source of audit evidence is said in the ISA 500, and here is what the standard said:

Some audit evidence is obtained by performing audit procedures to test the accounting records, such as analysis and review, reperforming procedures followed in the financial reporting process, and reconciling related types and applications of the same information.

By performing such audit procedures, the auditor may determine that the accounting records are internally consistent and agree to the financial statements.

More assurance is ordinarily obtained from consistent audit evidence obtained from different sources or of a different nature than from items of audit evidence considered individually. For example, corroborating information obtained from a source independent of the entity may increase the assurance the auditor obtains from audit evidence generated internally, such as evidence existing within the accounting records, minutes of meetings, or management representation. Information from sources independent of the entity that the auditor may use as audit evidence may include confirmations from third parties, analysts’ reports, and comparable data about competitors (benchmarking data).

Audit evidence is significant for auditors informing and supporting the audit opinion.

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Before expressing an audit opinion, auditors need to ensure that the evidence they are obtaining is strong enough to support their opinion regardless of whether the opinion is unqualified, qualified, adverse, or disclaimer.

Strong audit evidence means the evidence is sufficient and appropriate. Quality, quantity, and source of the evidence are the key ingredients of strong audit evidence.