Meaning of Vouching.
Vouching is the process of recognising obligation and authorizing cash disbursements.
It deals with the examination of PROFIT AND LOSS items. For example, you see that a company has said to make a payment for that particular object. To ensure this, you need to “find evidence” by vouching it to things like invoice, official receipt, bank statement etc.
Normally you vouch to original supporting documents, not photocopies. It is like tracing it to make sure that the transaction has indeed occurred/genuine. This is generally a step in assurance. Or say, the company made a purchase. these can be traced to purchase order, invoice etc.
Eg:- When you are given money to pay the Fee of your college, Parents ask us for the Fee receipt, for they barely have faith on us. Hence to Confirm the Amount and payment of fee, the Fee receipt acts as a Voucher.
Vouching in auditing means verification of any transaction with supporting documents attached with the voucher And verification refer complete checking system.It can be represented by the four Vowel:
A stand for Authority
E stand for Existence
I stand for Importance
O stand for Object and
U stand for value .
Well for the one who believe Vouching and Verification is the same, here is the Difference.
For More on vouching read the next post.
The above if From Lata Ahuja Ma’am, Lecturer and Author for Audit SYBAF.
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