An internal auditor is gathering evidence for an organization's internal audit engagement and requests a sample of vendor invoices from the organization. Which of the following is true regarding the reliability of this evidence?
An internal auditor is gathering evidence for an organization's internal audit engagement and requests a sample of vendor invoices from the organization. Which of the following is true regarding the reliability of this evidence?
Vendor invoices obtained from the organization generally have medium reliability. While they are considered more reliable than internally generated documents due to their origination from an external party (the vendor), they are not as reliable as evidence directly obtained by the auditor themselves or through external confirmations. The auditor needs to consider the potential for the organization's processing and handling of these invoices to affect their reliability.
I think it's only medium reliability since it's an external-internal type of evidence, meaning it was sent by vendor to the client (external) and then processed by client for payments (internal). An evidence will be considered as highly reliable if it was directly obtained by the auditor (i.e. through observation/external confirmations).
Rationale for this solution
Part 2
It doesnot have high reliability because IA team has only selected its sample; it cannot be low because invoices are external information. Hence, medium reliability is beeter option.