1. Definition in the words of J.R.Batliboi ,
“Vouching means testing the truth of
items appearing in the books of original entry”
2. From the definition it is clear that, A voucher is a
documentary evidence in support of a transaction in
the books of accounts. Vouching is used to find out the
accuracy and efficiency of entries in the books of
accouts.in other words vouching can be regarded as
the backbone of auditing.
3. To ensure that transaction are acceptable (ie.valid)
To ensure that all the entries are made with evidence
To see that all the transactions are recorded and
nothing is left out
Non business transaction are ignored
Detection of frauds and errors
4. It ensures accuracy of books of accounts
It helps the auditor to ensure transactions recorded in
the books are relating to business only
It helps the auditor to record all the transactions
It helps the auditor to go behind and beyond the
books of accounts
It helps the auditor to proceed with his work smoothly
It ensures that transaction is valid or not
5. Opening balance
Cash sales
Receipts from debtors
Income from interest, dividends.
Rent received
Bills receivable
Commission
Sale of investments
Bad debt dividends
Sale of fixed assets
income from hire purchase
6. Cash may not be recorded in books and cash may be
misappropriated
Discount allowed may be over stated
Cash sales may be under-recorded
Cash sales may be recorded as credit sales to fictitious
debtors
Fictitious entries for sales return may be made
Receipts from customers may not be recorded
Good debts may be recorded as bad debts
Deposits into banks may be over stated
Deposits of cash may be delayed
7. Auditor has to carefully examine the system of internal
check
Auditor can go into test checking
He should compare rough cash book with original cash
book
He should examine the methods of depositing daily
receipts
He should check the bank pass book with the entries in the
cash book
He should vouch cash receipts by reference to evidence
He should note that all the receipts are in printed forms
He should enquire the bad debts written off
8. The vouching procedure in regard to cash sales (i.e the vouching
of cash sales by an auditor) should be on the following lines
He should examine the system of internal check in operation in
regard to cash sales
After ascertaining the efficiency of internal check he should vouch
the cash sales as follows
1. Cash memos of each and every salesman should be checked at the
end of the day
2. He should compare the summary of daily sales of the salesman with
cash analysis of the receiving cashier.
3. He should examine the rough cash book
4. In case there is automatic cash register in use he should check daily
totals entered in cash book
5. The summary of daily sales should be checked with the entries in
stock register
6. He should verify the daily deposit of cash received into the bank
