Vouching is the backbone of auditing

According to De Paula “Vouching does not mean merely the inspection of receipts with
the transaction of a business, together with documentary and other evidence of sufficient
validity to satisfy an auditor that such transactions are in order, have been properly
authorized and are correctly recorded in the books”

Thus the act of examining vouchers is referred to as vouching.

Vouching is the backbone of auditing- According to this statement vouching is

the very essence of auditing. In the opinion of De Paula, “The whole success of auditing
depends upon the intelligence and thoughtfulness with which the part of the work is
done.” Thus vouching is a sort of preliminary work which forms an important part of
audit work. The accounts of a business begin with passing of entries. Further scrutiny is
to be made at a later stage. The purpose of checking entries by reference to appropriate
documentary evidence is to ensure that the transactions relating to a particular period
have been recorded and there is no voucher left unrecorded in the financial books. After
satisfying himself regarding the authority and authenticity of transactions the auditors can
categorically say that the books of accounts are correct and the balance sheet and profit
and loss accounts exhibit the true and correct state of the financial affairs of the business.
If vouching is done with care and caution by the auditor he can proceed well further in
his work. Vouching is not only the inspection of receipts with the cash book, it includes
the examination of the transactions of the business together with documentary and other
evidence of sufficient validity to satisfy the auditor that such transactions are in order,
have been properly authorized and are correctly recorded in the books. Thus the auditor
goes behind the books of accounts and traces the entries to their source.
Thus the importance of proper vouching was emphasized in the case of
(Amitrage Vs Brewer and Knott) while the auditors were found guilty of negligence
because of their failure to detect defalcation perpetrated by manipulations of wage
records and petty cash vouchers. It was clear that a good many documents were
suspicious on their face and called for enquiry. The auditor has to apply his experience
knowledge of accountancy, critical, keen observation and common sense to get the best
result out of vouching.