Auditing - Vouching

1) Vouching means an examination by the auditor of supporting documents to authenticate the transactions entered in the books of accounts.

2) Importance as well as Objects of Vouching:

1. Detection of errors and frauds
2. Reduce liability of auditors
3. Moral check on employees
4. Back bone of auditing 
5. Compliance with law
6. Capital and revenue expenditure
7. Genuineness of transactions
8. Nature of transactions
9. Accounting period
10. Accounting
11. Easy conduct of audit

3) Important points to be considered while Vouching :

1. All the vouchers are serially numbered and filed in order of the entries in the accounts.
2. Attention should be paid to the dates which must corresponds to the audit period.
3. The auditor should see whether the voucher is in the name of client.
4. He should see whether the amount written in figures and words is correct.
5. He should ensure whether the account head is properly written or not.
6. He should also see whether the voucher is signed by the recipient of the amount.
7. He should ensure whether the voucher is properly authenticated.
8. Auditor also see whether the expenditure shown is reasonable or not.
9. He should see whether the expenditure is for the cause of the business.
10. In case of expenditure  exceeding Rs. 5,000/= auditor should ensure whether the revenue stamp is affixed on the voucher or not.
11. Auditor should see whether the voucher is properly accounted in the books or not.