What is vouching in an audit?

Vouching is defined as the “verification of entries in the books of account by examination of documentary evidence or vouchers, such as invoices, debit and credit notes, statements, receipts, etc. Without the proof provided by vouching, the claims provided by the auditor are just that, only claims.

What are the importance of vouching in Auditing?

The main aim of vouching is to inspect all receipts & payments are properly accounted for & no fraudulent transactions are recorded. Vouching is a substantive audit procedure to obtain evidence as to completeness, accuracy & validity. With the help of vouching auditor come to know the genuineness of the transactions.

What are the types of vouching?

Vouching and Routine Checking Vouching includes routine checking which is a mechanical checking, whereas vouching is made on the basis of documentary evidence. A voucher may be a sales bill, purchase bill, payment receipt, pay-in slip, etc. All such types of documentary evidence are known as vouchers.

What is vouching explain its importance?

Importance of Vouching Vouching is a sort of preliminary work, which forms an important part of audit work. Vouching is carried on to ensure that the transactions relating to a particular period have been recorded and there is no voucher left unrecorded in the financial books.

Why is vouching important in the audit process?

Vouching is very useful in proving the accuracy of the entries in the books of accounts. It also indicates about that transaction, which is omitted from the books of account. Vouching is called the essence of auditing. So audit is not possible without vouching.

How can an auditor vouch for a receipt?

Steps in Vouching Receipts from Debtors • Receipts issued – Auditor can vouch the receipt issued to debtors for collection of money. Counter foil or carbon copies to be compared with entries made in cash book.

What can vouching do for a financial statement?

Intelligent and faithful vouching will establish reliability on financial statements, i.e., Profit and Loss account and Balance Sheet of any organization. If adequate internal control system exists, the Auditor may choose to do test checking instead of complete vouching.

What’s the difference between routine checking and vouching?

Differences between Routine Checking & Vouching RoutineChecking 1. It is the checking of costing, carry forwards, postings and balancing. 2. Concerned with checking of arithmetical accuracy of books of original entry. 3. Narrow concept which involves merely checking of books of accounts.