Definition of Vouching Lawrence Dicksee had defined vouching as an act of comparing entries in the books of accounts with documentary

evidence in support thereof.

OBJECTIVES OF VOUCHING The main objectives of vouching are: To examine the accounting entries recorded in the books of accounts with reference to documentary evidence known as vouchers.

To examine the authenticity of the transactions recorded in the books of account. To examine the adequacy and reliability of documentary evidence.

1. Proper Evidence The purpose vouching is to note that proper evidence is available for every entry. The signatures, initials and rubber stamp are evidence that document has been authorized and checked. 2. Proper Authority The purpose of vouching is to note that there is proper authority behind every transaction. In the absence of any signature of manager the transaction are not acceptable at all. 3. Right Period The purpose of vouching is to check that date of the vouchers relate to accounting period. The adjustments in books are made on the basis of current year record of transactions. 4. Correct Amount The purpose of vouching is to check that correct amounts have been recorded in the entry. The vouching is useful to record only correct amounts in the books of accounts. 5. Capitals and Revenue Analysis The purpose of vouching is to examine the analysis of transaction into capital and revenue. The expense relating to one year is treated as revenue other wise it is called capital.

6. Purchase for Business The purpose of vouching is to check that purchase relate to the nature of business. The private purchase cannot be recorded as business due to vouching. 7. Arithmetical Accuracy The purpose of vouching is to see the arithmetical accuracy of books of accounts. The auditor to confirm that books are accurate can check the total subtotals, casting and posting. 8. Postings The postings of total from journal to the ledger can be voucher by the auditor. He can see through vouchers that posting are complete and correct. 9. No Error The purpose of total vouching is to check that there are no errors in the books of accounts. The errors are the result of carelessness or over work. But audit staff is not over loaded so they can locate error. 10. No Fraud The purpose of vouching is to examine that no fraudulent payments are made. The fraud can be committed due to matching of minds of employees and customer. The auditor can vouch the entries top disclosed such frauds. 11. Castings The purpose of vouching is to check castings or loads. The auditor can calculate all total by himself. He can compare the totals with books to maintain accuracy. 12. Cast at Bank The purpose of vouching is to determine true cash at bank. He can vouch receipt and payments. The result is that he can check whether cashbook is correct or not. 13. Cash Balance The purpose of vouching is to check that cash in hand figures are facts. The cash can be counted. He can compare it with cashbook. He can apply test checking to determine accuracy. 14. Reporting The purpose of vouching is to form an opinion for the purpose of reporting. In case of true and fair view there is good report. In the absence of such result there may be qualified report

IMPOTANCES Successful of audit depends upon proper selection of samples. Nowadays, substantive tests are conducted in a routine manner. Samples are chosen on the basis of random number selections. What is missing is proper designing of substantive tests. There should be intelligent selection of samples based on the review of main ledger accounts and after conducting analytical review. One should also remember that vouching has its place in audit, though this method of audit testing is time-consuming. By vouching the auditor goes behind the accounting

records and traces the entries to their source. Where the internal controls system is weak, vouching may not be effective as the information may have been purposely entered and may be contrary to the facts. In case of a reasonable internal control in place, vouching should be carried out of key operational areas.

At the time of conducting the vouching the following points must be borne in mind: In order to ensure that valuable time is not lost in vouching, the client should produce to the auditor all the vouchers arranged in the order in which entries appear in the books of account. The auditor must satisfy himself that the dates given on the vouchers which are recorded in the books fall in the year under review. Satisfaction must be made in respect of the head of account debited or credited from the availability documentary evidence. While examining the documentary evidence it should be carefully seen that the transaction pertains to the business. Care must be given to those vouchers which are in the personal names of the partners, managers, secretary and directors. Every voucher has been passed by the authorized official. Attention should also be paid to the point where the voucher bears proper revenue stamp. Complete notes should be taken in respect of such items as require further clarifications or evidence. Attention should also be paid to the amount to ensure that it agrees both in words and figures. Any alternation particularly in respect of the figure on the receipts and vouchers must be fully inquired into.

What Does Voucher Mean? A document recording a liability or allowing for the payment of a liability, or debt. A voucher would be held by the person or company who will receive payment.
Vouchers types

1. 2. 3. 4. 5. 6.

Payments Receipts Sales Purchases Journals Debit Notes

7. Credit Notes 8. Delivery Challans 9. Goods Inward 10. Goods Outward 11. Stock Journals 12. Physical Stock Vouchers 13. Contras 14. Memos 15. Sales Orders 16. Purchase Orders 17. Rejection Notes 18. Reversing Journal