Lesson: Sources of Evidence

In this lesson, Nick Palazzolo discusses the different sources of audit evidence, which involve obtaining and evaluating information to create a hierarchy of reliability. The lesson covers four main types of evidence: direct personal knowledge, external evidence, internal evidence, and oral evidence. He explains how evidence from an independent source provides the highest level of assurance and the importance of verifying any evidence provided by the client. Further, the lesson delves into the concept of opening and ending balances in a financial statement and the use of recalculation as a verification method. Finally, Nick explains the importance of obtaining sufficient appropriate audit evidence to determine whether any misstatements exist that could materially affect the current period's financial statements.