Vouching is the heart of auditing because it provides evidence that recorded transactions are:
In exams, a good answer includes: meaning → objectives → principles → practical steps for key transactions.
Vouching means checking entries in books of accounts with documentary evidence (vouchers) to verify their accuracy and authenticity.
Simple definition:
Voucher is a document that supports a transaction.
Types:
Generally, external vouchers are more reliable.
Objectives:
Key principles:
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Objectives of vouching (any five):
Thus vouching strengthens audit evidence.
Principles of vouching (any three):
Auditor should also mark vouchers as audited to prevent reuse.
Financial auditing is the process of examining an organization's (or individual's) financial records to determine if they are accurate and in accordance with any applicable rules (including accepted accounting standards), regulations, and laws.
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Vouching is the heart of auditing because it provides evidence that recorded transactions are:
In exams, a good answer includes: meaning → objectives → principles → practical steps for key transactions.
Vouching means checking entries in books of accounts with documentary evidence (vouchers) to verify their accuracy and authenticity.
Simple definition:
Voucher is a document that supports a transaction.
Types:
Generally, external vouchers are more reliable.
Objectives:
Key principles:
Steps:
Common fraud: cash received not recorded (cash suppression).
Steps:
Common fraud: fictitious expenses and duplicate payments.
Purchases:
Purchase returns:
Sales:
Sales returns:
Common fraud: recording fictitious sales or suppressing sales returns.
Look for ghost employees and inflated wage payments.
Vouching flow:
Book entry → related voucher → authorisation check → arithmetical accuracy → proper classification → audit conclusion
Voucher reliability table:
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Vouching is the process of verifying entries in the books of accounts by examining supporting vouchers to ensure transactions are genuine, authorized, accurate and properly recorded.
Book entry → Voucher → Authorization → Accuracy → Classification → Conclusion
Thus vouching forms the base of audit evidence for transactions.