Vouching refers to an auditing procedure wherein financial records and underlying transaction evidence are compared to substantiate the accuracy and completeness of recorded account balances and disclosures.
Objectives of Vouching:
- Verification of the authenticity and validity of original documentation supporting posted ledger entries.
- Confirmation that all relevant supporting documentation is reflected properly in the books of accounts.
Types of Vouching:
- Physical – Tracing amounts to source documentation such as invoices, receipts, contracts.
- Mathematical – Recomputing accuracy of arithmetical functions like extensions, additions.
- Clerical – Checking postings and cross-references between ledgers and subsidiary records.
Example:
Vouching a sample of accounts payable entries involved matching invoices to goods receipts and verifying vendor data across multiple systems.
Benefits:
Substantive vouching procedures provide strong audit evidence to detect unintended errors or potential management override or fraud.
