BBA 7th Semester

VOUCHING
A voucher is a documentary evidence in support of a transaction in the books of account.
Vouching refers to the inspection by the auditor of documentary evidence supporting a
transaction. Broadly speaking, vouching means the examination of every business transaction
with its supporting documentary evidence. Vouching enables the auditor to satisfy himself that
the transaction is in order and has been correctly entered in the books of accounts.
 Features or Characteristics of Vouching:
i. Method of Examination:
Vouching is a method of examination of accounting records with the help
of documentary evidence.
ii. Supported by Voucher:
In vouching it is ascertained that every entry in the books of accounts is
supported by a voucher and no voucher has gone unrecorded in the
books.
iii. Concerned with Business:
In vouching it is ascertained that the transaction is concerned with the
business.
iv. Correct Amount:
In vouching it is ascertained that the amount involved in the transaction
has been correctly recorded.
v. Appropriate Account:
In vouching it is ensured that the entry has been correctly made in the
appropriate account.
vi. Reliability:
In vouching we ensure that the evidences are adequate, reliable and
authenticated.
 Objectives of Vouching:
The objective of vouching is to:
i. Make sure that proper evidence is available for all entries made in the books of
accounts.
ii. Verify the proper authority for every transaction recorded in the books of
accounts. In the absence of authority such as signature of a responsible officer,
the transactions are not acceptable.
iii. Ascertain that the transactions recorded in the books of accounts are related to
the business of the client.
iv. Check that all vouchers relate to financial period under audit.
 v. Check that all transactions related to business unit have been recorded in the
books of account and no transaction has been omitted.
vi. Check the arithmetical accuracy of book of account.
vii. Examine that the amount involved in the transaction has been correctly
recorded in the books of original entry.
viii. Check that the accounts debited and credited with respect to each transaction
are correct.
ix. Examine that the transaction has been correctly recorded in the books of
accounts.
x. Ensure that all receipts and payments have been properly recorded in the cash
book and no fraudulent payment has been made.
xi. Check that no fraudulent transaction has been recorded in the books of account.
xii. Check that proper distinction has been made between capital and revenue items
while recording transactions in the books of original entry.
xiii. Form an opinion about the fairness of accounting record for reporting to the
management.

Importance of Conducting Vouching:

Vouching is an important aspect of auditing. Auditing without vouching is incomplete.

Vouching is the essence of auditing. Vouching is the first and most important step in
auditing. Vouching is considered backbone of auditing as it is one of the most powerful
tools in the hands of auditor.

i. In vouching, the accounting record is compared with documentary evidence,

therefore, the auditor can easily locate errors.
ii. Careful vouching helps the auditor to detect frauds like misappropriation of
cash or manipulation of accounts; however, cleverly committed.
iii. In the course of vouching, the auditor can easily detect errors and frauds. The
fear of detection of errors and frauds will prevent the commission of errors and
frauds.
iv. In vouching all entries are checked. Special tick marks are used by auditor. Thus,
alteration in figures after vouching becomes impossible.
v. All vouchers are compared with entries in the books of original record. Thus,
vouching provides a chance of detailed checking of accounting records.
vi. Vouching helps to examine the proper authority for every transaction recorded
in the books of account. In the absence of proper authority the transaction is
considered doubtful.
vii. Vouching is a useful tool in the hands of auditor to check that there is no
omission of any business transaction. In vouching all entries are checked. The
omission can be traced easily.
viii. Under vouching, recording of fictitious transactions is eliminated. Thus vouching
helps to record only actual transactions.
ix. Vouching helps the auditor to verify the assets and liabilities of the
organization.
x. In the process of vouching all vouchers are compared with entries in journal and
posting into ledgers. Thus, vouching ensures that no fraudulent transaction has
been recorded in the books of accounts.
xi. It is through vouching that an auditor can satisfy himself as to the correctness
and completeness of transactions in the books of accounts.
xii. The success of audit process depends on vouching. The success of an audit
depends upon the efficiency with which vouching is completed.
xiii. The auditor satisfies himself about the accuracy of the recorded transactions
through the process of vouching. After being satisfied, the auditor can express
his opinion about the fairness of financial statements.