VOUCHING & VERIFICATION

Vouching

 Act of examina on of voucher is known as vouching.

 Vouching involves in examina on of income, expenses & other transac ons (receipt, payment) through inspec on of documentary evidences.
 Voucher is primary document for accoun ng & vouching is backbone of audi ng.

Objec ve of vouching

 To detect fraud & error (Fake invoice can be iden fied)

 To know the nature of transac on (Eg. Capital or revenue)
 Iden fy the omi ed transac on
 To ensure authoriza on for every transac on
 To ensure completeness of transac on (Eg. Entry to book salary & then salary payment)

Verifica on

 Examina on of item of assets & liabili es through inspec on of documentary evidence as well as through cross verifica on of actual assets & liabili es.
 It involves in assuring correctness of value of assets and liabili es, tle and their existence in the organiza on.

Objec ve of Verifica on

 Existence  Cost
 Ownership  Free from charge
 Authoriza on  Valua on
 Disclosure
Difference

Par cular Vouching Verifica on

Meaning Examina on of vouchers & documentary evidence in support of
transac ons contained in books of account.
Timing Generally conducted throughout the year
Objec ve To ensure completeness, accuracy & validity of transac on
Authority Generally conducted by junior staff
Basis Mostly documentary evidences are checked
Examina on of item of assets & liabili es through inspec on of documentary
evidence as well as through cross verifica on of actual assets & liabili es.
Generally carried out at the year end
To ensure the existence, ownership, completeness, valua on, presenta on and
disclosure.
Verifica on conducted by experienced staff
In cons tute examina on of both documentary evidence & observa on of
existence.

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 Key Summary for Vouching
Short trick but not limited to this (@VOUCHA-IN: Validity, Occurrence, Unauthorized, Completeness, Heading, Accuracy, Internal Control, Nature)
Item Validity Occurrence Unauthorized Completene Heading/ Accuracy I.C. Nature E.C. TDS/Tax Compliance Other specific point
(Expense/Payments) /Authoriza on ss classifica on (C/R) with NAS, L & R
Purchase of goods &
Service

Purchase return

Salaries & wages

Insurance Premium

Travelling exp./
Foreign travelling
Expenditure

Research &
Development
Expenditure

Remunera on paid to
director

Adver sement
Expenses

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Preliminary Expenses

Sales commission

Payment of personal
expenses of director

Payment of income tax

Payment of dividend

Interest expenses

Custom & excise duty

Advance given to
supplier

Pe y cash expenses

Other miscellaneous
expenses

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Item Validity Occurrence Unauthorized Completene Heading/ Accuracy I.C. Nature E.C. TDS/Tax Compliance Other specific point
(Income/Receipt) /Authoriza on ss classifica on with NAS, L & R
Sales

Sales return

Sales of departmental
stock

Good sent on
consignment basis

Good sent on sales or

return basis

Commission income

Recovery of bad debt

wri en off

Rental income

Income from
investment i.e.

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interest, dividend,
gain on disposal

Royalty received

Receipt of subsidy

Insurance claim

Sale proceeds from

scrap or junk material

Returnable container

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 Key Summary for Verifica on
For Assets: Short trick but not limited to this (@CAVE OF DP: Cos ng, Authoriza on, Valua on, Existence, Ownership, Free from charge, Disclosure, Presenta on)
Item (Assets) Cost Authoriza on Valua on Existence Ownership Free Disclosure & I.C. E.C. MRL Compliance Other specific point
(Physically) from Presenta on with NAS, L & R
charge
Land & Building

Assets acquired on
hire & purchase

Plant & machinery

Capital work in
progress

Furniture & Fixture

Motor vehicle

Investment

Inventories/stock

Asset abroad

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Cash & bank balance

Prepaid expenses

Small tools/ loose tools

Patent

Copyright/Trademark Obtain schedule

Wri en agreement/ registra on assignment
deed

Goodwill

Debtors

Bills receivable

Sinking fund policies/

Endowment policies

Con ngent Assets

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 For Liabili es: Short trick but not limited to this (@MEELAA: MRL, Existence, External confirma on, Ledger verifica on, Accuracy, Analy cal procedure, Disclosure,
Presenta on)
Item (Liabili es) MRL Existence of E.C. Ledger Accuracy Analy cal Completeness I.C. Valua on Disclosure & Compliance Other specific point
Obliga on verifica on procedure Presenta on with NAS, L & R
Loan & Borrowing

Bills payable

Trade creditors

Outstanding Expenses

Provisions
 Tax
 Bonus
 Bad debt

Amount due to
subsidiary companies

Con ngent Liabili es

Share Capital

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