Principle of Objective Evidence

True Tamplin

Written by True Tamplin, BSc, CEPF®
Updated on November 16, 2021

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.

True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

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

True contributes to his own finance dictionary, 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, view his author profile on Amazon, his interview on CBS, or check out his speaker profile on the CFA Institute website.

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