Which type of audit evidence is considered the least reliable?

Verbal evidence is considered the least reliable type of audit evidence primarily because it is based on oral communication and lacks the supporting documentation that can substantiate the claims made. This reliance on spoken information can lead to misinterpretations or inaccuracies, as verbal statements can be influenced by mood, memory, or personal bias. In an auditing context, the strength of evidence increases with its ability to be verified and supported by tangible documentation, which is lacking in the case of verbal evidence.

Confirmative evidence, physical evidence, and documentary evidence each provide a higher degree of reliability because they can be independently verified, traced back to a source, or directly observed. For instance, confirmative evidence usually involves obtained confirmations from third parties, physical evidence can be seen or touched (such as equipment or facilities), and documentary evidence consists of written records that provide a clear and historical reference. These formats help to ensure that the audit findings are based on objective and verifiable information, unlike verbal evidence, which may not hold the same level of assurance.