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Meaning and Objectives of Vouching

Vouching refers to the examination of documentary evidence like invoices, receipts, and contracts to verify the accuracy of transaction entries in accounting books. The objectives of vouching include detecting errors and frauds by validating each transaction with supporting documents, verifying the truthfulness of accounts, finding unrecorded transactions, ensuring transactions are properly authorized, and identifying non-business transactions improperly recorded in business accounts. Vouching is an important initial auditing procedure to ascertain the regularity of transactions and financial records.

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3K views2 pages

Meaning and Objectives of Vouching

Vouching refers to the examination of documentary evidence like invoices, receipts, and contracts to verify the accuracy of transaction entries in accounting books. The objectives of vouching include detecting errors and frauds by validating each transaction with supporting documents, verifying the truthfulness of accounts, finding unrecorded transactions, ensuring transactions are properly authorized, and identifying non-business transactions improperly recorded in business accounts. Vouching is an important initial auditing procedure to ascertain the regularity of transactions and financial records.

Uploaded by

Ekta Tiwari
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Meaning And Objectives Of Vouching:

Meaning Of Vouching:
Voucher is known as the evident for the support of a transaction in the books of account. It may be bill, receipts, requisition form, agreement, decision, bank paying slip etc. The act of examining documentary evidence in order to ascertain the accuracy of entries in the account books is called "Vouching". Vouching is a technical term which refers to the inspection by the auditor of documentary evidence supporting and substantiating a transaction. Simply stated, vouching means a careful examination of all original evidence i.e invoices, statements, receipts, correspondence, minutes and 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. Therefore, vouching is the act of testing the truth of entries appearing in the primary books of accounts. It is initial for auditing.

Objectives of Vouching:
Main objective of vouching is to find out the regularity or irregularity of transactions, frauds and errors. Regularity means maintaining record and performing the work compliance with the rules, regulation and law. But irregularity means doing the work crossing to the line of rules, regulation and laws. Some of the major objectives of vouching are given below: 1. To Detect Errors And Frauds All transactions are to be supported by evidence. Each document should be proved by authorized authority. With the help of vouching we can detect errors and frauds by verifying each transaction. Planned fraud can be detected through vouching. 2. To Know The Truth Of Account Each and every transaction is checked and ratified on the basis of support document. So, we can easily know the truth of account. 3. To Find The Unrecorded Transactions Each and every transaction is checked and ratified on the basis of document. Vouching helps to find out the unrecorded or missing transactions. If any voucher is found unrecorded, auditor can suggest to record such transactions.

4. To Know That All The Transactions Are Authorized If the transactions are made on the consent of concerned authority, such transactions are known as authorized transactions. If transactions are not authorized, such transactions can be fictitious transactions. So, such fictitious transactions ca be found with the help of vouching. 5. To Know That Only The Business Transactions Are Recorded Sometimes, transactions are performed for individual purpose but payment is made out of business. Such transactions should not be recorded in account of business. If such transactions are recorded, we can find it with the help of vouching. To know the real profit or loss of business, such transactions are to be separated.

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