Principle of Objective Evidence

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on February 22, 2023

Definition and Explanation

The principle of objective evidence (or principle of objectivity) states that no accounting record should be created unless it is supported by independently verifiable (i.e., objective) evidence.

Generally, such evidence is in writing or should be reduced to writing before an accounting entry is made.

All transactions must be evidenced by a document. For example, cash sales are evidenced by cash memos, credit sales by invoices, and payments through the bank by check.

Purchase of larger value such as land, building, and vehicles are generally supported by elaborate legal documentation, including title deeds, sale deeds, and so on.

If the principle of objective evidence is not adhered to, the accounting records will lose their credibility, and financial statements will fail to present a true picture of the business.

Principle of Objective Evidence FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.