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Vouching

In: Business and Management

Submitted By calvinmusewe
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VOUCHING

A voucher is documentary evidence in support of a transaction in the books of account. Vouching is a technical term which refers to the inspection by the auditor of documentary evidence supporting and substantiating a transaction. It means to substantiate an entry in the books of account not only with any documentary evidence such as agreements, receipts, counter foils of a receipt book, or pay-in-book, contracts, but also to see that the transaction has been properly authorized, recorded and entered in the books of account e.g. verification of the entries in the invoice book with the invoices, checking of the cash receipts with counter foils of the receipt books, the checking of the cash payments with the receipts issued by the payee an so on. Vouching is testing the truth of items appearing in the books of original entry.

Clever frauds can only be discovered by proper vouching as for example if the auditor simply compares the entry on the credit side of the cash book with the voucher, he might be deceived as in a case where the purchase was not for the business or the receipt might have been for the previous year.

In the case o receipt side of the cash book it is possible that a less amount might have been entered on the counter foil than the money actually received.

It is through vouching that an auditor can satisfy himself as to the authenticity and completeness of transactions in the books of accounts. In case he is negligent he will be held guilty.

Vouching also includes checking of additions ledger postings, extracting of balances in the ledgers etc. The extent to which the auditor should check will depend upon the size of business, the accounts of which he is auditing.

Voucher
As a voucher is any documentary evidence in support of a transaction it may be in the form of a receipt, a counterfoil of a receipt book, an agreement,

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