Which is a type of audit evidence commonly used when testing revenue recognition?

• A. Documentary evidence
• B. Personal recollection from management
• C. Audit's internal data mining outputs
• D. Social media sentiment

Answer: (A)

When testing revenue recognition, documentary evidence is the type of audit evidence you rely on most. Source documents like sales invoices, shipping notices, customer contracts, and bank receipts provide objective, verifiable proof that a sale occurred, the amount recorded, and the timing of the transaction. This kind of evidence supports key judgments in revenue testing—existence (the sale happened), accuracy (the amount is correct), and cutoff (revenue is recorded in the correct period). Because these documents come from the business’s operations or external parties, they offer reliable, traceable support for the numbers auditors examine.

Other options don’t fit as well: relying on management’s memory introduces bias and is not verifiable; internal data mining outputs can help identify patterns but aren’t direct evidence of a specific transaction without corroboration; social media sentiment has little relevance to whether revenue was properly recognized.