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Vouching and voucher
MEANING OF VOUCHING
The act of establishing the accuracy and authenticity of
entries in the account books is called vouching. Testing the
truth of items appearing in the books of original entry is
vouching. According to Ronald A. Irish of Australia defines
: vouching is technical term which refers to the
examination by the auditor of documentary evidence
supporting and substantiating a transaction. It is consider
to be the essence of auditing and therefore the auditor
should be careful while vouching. Finally, vouching means
not only the documentary evidence but also to see that the
transaction has been properly authorized, recorded and
entered in the books of account

2. Voucher
• A voucher is a documentary evidence in support of
the transaction in the books of account. It may be
receipt , counterfoils of a receipt book , an
agreement , resolution passed by the board of
director or shareholder and as record in the
minute books , an invoice bank paying –in slip,
bought note , sold note , correspondence, gate
keeper, wages book, order book etc.

3. Following point must be borne in mind while
examining voucher
• 1 : All the voucher are consecutively numbered and filed
in order of the entries in the accounts. If the client has
not done ,so the auditor has a right to ask him to do so.
• 2 : He should pay attention to the dates , which must
corresponded with the cash book, name of the party to
whom the voucher is issued with amount.
• 3 : The voucher inspected should be cancelled by a
stamp if it is produced again.
• 4 : He should see that every voucher is passed as in
order by a responsible officer . The signature of the
officer should be noted .
• 5:He should also note , whether the voucher is stamped ,
if the amount of the voucher is above maximum limit.

4. Continue
• 6 : He should also find out the nature of payment as to
whether it is relate to the business.
• 7Special attention should be given to those voucher which
are in the personal name of one of the partners, directors,
manager or secretary.
• 8 : He should see as to which account the payment is
posted-revenue or capital.
• 9 : Attention should be paid to the amount both in words
and figures .If they differ,the matter should be investigated
• 10: Note should be made of any item which requires
further elucidation or information which is available from
partnership deed.
• 11:Receipted invoice should not be accepted as a voucher,
it is danger for twice.
• 12. If duplicate voucher for a missing one is produced, it
should be properly scrutinized. Q-no 14

5. INTERNAL CHECK AS REGARD CASH
• Before the auditor starts the vouching of the cash book,
he should enquire about the system of internal check in
operation. There are lot chances of misappropriation of
cash if there is no well organized system of inter check.
The following system of internal check as regard receipt
and payment of cash is suggested:
• When cash is received, it should be acknowledged by a
printed receipt which should have a counterfoil or a
carbon receipt. Cashier should not sign receipts and
counterfoils. The receipts should be consecutively
numbered. The unused receipt book should be kept under
lock and key. Spoiled receipts should be cancelled and
must not be detached from the counterfoils. No blank
counterfoils should be accepted

6. continue
 Remittances should be opened by the cashier in the
presence of a responsible officer who should not be
connected with the cashier’s office. cheques received
should be crossed, Not negotiable-A/C payee only.
 As soon as cash is received, it should be entered in a
rough cash book or diary.
 ash registers are very useful for checking receipts.
 All the receipts of the day should be deposited in the
bank at the end of the day or the next day.
 Bank reconciliation statement should be prepared
frequently by the cashier and also by someone else.
 The cashier should not have any control over the lenders.
 Petty cash should be organized under the impress
system.

7. Objectives of cash book audit
 The main objects of the audit of the cash book
may be summarized thus:
1. To ensure that all receipts are accounted for;
2. To ensure that no fraudulent payments have
been made;
3. To know that all receipts and payments have
been properly recorded; and
4. To verify the cash in hand and at bank

8. Continue…
 Castings of cash book should be independently checked.
 Internal control over the preparation of wages sheets to
prevent fraud and manipulation should be exercised.
 All payment as far as possible, except for petty cash,
should be made by cheques.
 The method of recording the cash sales has been dealt
with below in detail. This is should be so organized that
chances of misappropriation are reduced to a minimum.
 Cashier should not sanction the payments of special
nature. Directors should do so. Question -15

9. Internal check as regard credit purchases:
The system of internal check will depend upon the size of
the business and the staff available. Whenever goods are
required in a particular department, its head should send to
the purchasing department the “Purchase Requisition”
which should show the quality, quantity, if possible the
price or the maximum price at which they may be
purchased, the time by which the goods must be supplied.
1. All the orders sent out should be recorded in the purchase
order book which should have carbon copies-one to be
sent to the supplier and the other to be retained for
reference purposes.

10. Another point:
2. when the goods are received, the gate-keeper or the
store-keeper should make an entry in the goods
inward book.
3. the invoice should be checked with the goods inward
book maintained by the store-keeper to see that the
goods are correctly recorded in the store-register
according to the invoice.
4. A clerk should check the invoice regarding calculations.
5.Invoice should be sent to the head of the dept. who
placed the order for goods to see whether the prices
and qualities are correctly recorded in the invoice.

11. Continuing…
6. The departmental head will now pass on the invoice
to the clerk who will record the same in the purchases
book.
7.Every person who has to deal with the invoice and
the goods should initial the invoice.
8. Goods inward book should be compared with the
purchases book.
9. He should see that the name of the creditor is the
same as has been entered in the “Particulars” column
of the purchases book. Question 24, 27**

12. Internal check regarding credit sales
 sales are two types cash sales credit sales.
 whenever an order is received , it should be recorded
in the order received book and such things should be
written , the date of order , the name of customer ,the
name of goods and the date of delivery , mode of
transport etc.
 A copy of it is sent to despatch department.
 When the despatch department has packed the goods,
another clerk should compare goods with ordering
goods which is sent to counting house .
 A responsible official mark at this stage at which rate
the goods are to be charged

13. Continue
 The invoice will be made in duplicate or triplicate by
means of carbon papers.
 One copy of invoice will be sent to invoice clerk to
keep sales book and later it is sent to customer ,
another copy will be sent to gatekeeper to record
goods outward book and 3rd copy will be retained for
further reference.
 If orders are received through travelers , they should
be given order books with triplicate copies, one copy
has to be handed over to customer, 2nd copy has to
be sent head office and 3rd copy is to be retained by
traveler for his record. Question 25

14. Loophole to make fraud regarding wage
 The chances of fraud or errors are:
a) The inclusion of fictitious name of dummy workers in the
wage book;
b) Errors or fraud in time and piece-work records;
c) Possibility of clerical errors;
d) The name of the employees who have resigned or
dispensed, may have been included in wages sheets;
e) Over stating of wage rate; Understatement of deduction
f) Conversion of unpaid wages;
g) Over footing of pay roll sheets; page -85

15. Auditor’s duty as regard wages
• He should see whether the internal check system is
satisfactory and there is no loophole for any fraud.
• He should check the casts of the wages sheets.
• He should check the calculation here and there.
• He should check the amount with cheque drawn.
• To identify the dummy worker he should check the job card,
foreman and gate-keeper’s register.
• He may pay a surprise visit on the day of payment of wages
and check the identity card.
• Wages sheet should compare with previous sheet.
• Number of worker should compare with Insu card&PF
• Test check the signatures and thumb with previous m.