Vouching
The act of examining documentary evidence in order to ascertain the accuracy and authenticity of entries in the books of account is called “Vouching”. In other words vouching means a careful examination of all original evidences that is invoices, statements, receipts, correspondence, minutes, contracts etc. With a view to ascertain the accuracy of the entries in the books of accounts and also to find out, as far as possible that no entries have been omitted in the books of accounts. According to Dicksee. “Vouching consists of comparing entries in books of account with documentary evidence in support thereof.
According to R. B. Bose, “By vouching is meant the verification of the authority and authenticity of transactions as recorded in the books of account”.From these definitions it is clear that vouching means testing the truth of entries appearing in the primary books of account, vouching includes routine checking of carry forwards, extentions, posting into the ledgers,casts, sub-casts and other calculations in the books of original entry. Vouching may be lengthy process in a big organisation unless there is efficient internal control system iiv existence.
The vouching is an important tool in the hands of auditor provided he handles this work with intelligence,observation and commonsense. Vouching is a sort of preliminary work which forms an important part of audit work. Since accounts of a business begin with the passing of entries, hence it becomes a basis for further scrutiny to be made at a later stage. The auditor, after satisfying himself with regard to the authority and authenticity of transactions, can only then say specifically that the books of account are correct and the Balance sheet and Profit and Loss Account exhibit the true and fair state of the financial affairs of business.This is why vouching is said to be the backbone of auditing.But all this depends upon the efficiency of the auditor. He, besides checking the arithmetical accuracy of the books or comparing the entries with the available documentary evidence, should also go to the source of a transaction. He should also see that the transaction has been properly authorised. Frauds can be detected only by proper vouching conducted in an intelligent and searching manner. The importance of proper vouching was emphasised in the case of “Armitage Vs. Brewer and Knott . In this case auditors were found guilty of negligence because of their failure to detect defalcations committed by manipulating wage records and petty cash book.
Objects of Vouching
1. To see that all transactions connected with the business have been recorded in the books
of account.
2. To establish that no transaction which is not connected with the business has been recorded.
3. To verify that all recorded entries are genuine.
