>> December 30, 2008
Voucher is a documentary evidence in support of a transaction in the books of account .The act of establishing the accuracy and authenticity of entries in the account books is called vouching .Vouching may be defined as an examination every transaction of a business with relevant valid documentary and other evidence with a view to find out if it is genuine and bona fide. It aims at ascertaining whether a transaction is in order, has been properly authorized and is correctly recorded in the book.
Ronald H. Irish states that vouching is technical term which refers to the inspection by auditor a transaction. Vouching is considered to be the essence of auditing and therefore the auditor should be the very careful while vouching. Vouching means to substantiate an entry in the books of account not only with documentary evidence such as agreements , receipts , counterfoils of receipt books or paying in book contracts , but also to see that the transaction has been properly authorized , recorded and entered in the book , accounts e.g. verification of the entries in the invoice book with the invoices , checking of the cash receipts with the counterfoils of the receipts , book ,the checking of the cash payments with the receipts issued by the payee and so on . Vouching means testing the truth of items appearing in the books of original entry. The success of an auditor, in vouching depends upon his intelligence, critical bent of mind, common sense observation and fact with which he handles his work. He should go beyond the books of account and go to the source of a transaction. If he simply compares the entry , say ,on the credit side of a cash book with the voucher , it is possible that he might not have been for the business or the receipt might have been for the previous year .Clever frauds can be discovered only by proper vouching . Therefore, it is very important that the items with great care and intelligence. It is through vouching that an auditor can satisfy himself as to the authenticity and completeness of transaction in the books of accounts. In case he will be held guilty as was decided in case of Armitage V2, Brewer and Knott.
Vouching also means checking of addition ledger positions, extracting of business in the ledger. The extent to which the auditor should check will depend upon the size of the business, the accounts of which he is auditing, if it is a big business, efficient internal check will be in operation and hence the auditor will be justified in relying upon a few test checks, while in a small business, internal check may not be in operation and hence the auditor will have to check every entry. To be on the safe side, the auditor will do well to check the entries in detail because the curtailment of work will not in any way reduce his responsibility.
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