To determine the correct answer, let's first understand the concept of internal and external audit evidence. Internal evidence refers to the evidence that is generated from within the organization being audited, such as documents, records, and other information that are created and maintained by the entity itself. On the other hand, external evidence is obtained from outside the organization, such as confirmations from third parties, and is generally considered more reliable because it is less susceptible to manipulation or bias by the entity being audited.
Let's examine each option given:
Option A: Inspection report - This could be either internal or external, depending on who prepared the report. If it's prepared by the entity's internal quality control team, it would be considered internal evidence. However, if it's prepared by an external party, such as a third-party inspector, it would be considered external evidence.
Option B: Purchase invoice - A purchase invoice is typically received from an external party (the supplier), making it an example of external evidence. This is because it originates from outside the organization and is less likely to be manipulated by the entity being audited.
Option C: Goods received note - This document is usually prepared by the entity itself upon receiving goods from a supplier. Since it is generated internally, it is considered internal evidence.
Option D: Bank reconciliation statement - This statement is prepared by the entity to reconcile its internal records of cash transactions with the bank's records. It is an internal document and thus considered internal evidence.
Given the definitions and explanations above, the option that is NOT an example of internal evidence is the one that originates from outside the organization, which is the purchase invoice received from a supplier.
Hence, **Option B** is the correct answer.