0% found this document useful (0 votes)
27 views

An Assignment On Vouching (Chapter-3)

This document discusses the concept and process of vouching in an audit. It defines vouching as examining documentary evidence to verify the authenticity of book entries. The objectives of vouching are outlined, such as ensuring transactions are valid and recorded correctly. Specific guidance is provided on vouching cash transactions like receipts, payments, and sales. Vouching of credit sales is also summarized. The overall purpose is to verify the accuracy and validity of financial records through examination of supporting documentation.

Uploaded by

sabbir Hossain
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
0% found this document useful (0 votes)
27 views

An Assignment On Vouching (Chapter-3)

This document discusses the concept and process of vouching in an audit. It defines vouching as examining documentary evidence to verify the authenticity of book entries. The objectives of vouching are outlined, such as ensuring transactions are valid and recorded correctly. Specific guidance is provided on vouching cash transactions like receipts, payments, and sales. Vouching of credit sales is also summarized. The overall purpose is to verify the accuracy and validity of financial records through examination of supporting documentation.

Uploaded by

sabbir Hossain
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 3

An Assignment

On
“Vouching”

Course Name: Taxation and Auditing


Course Code: MGT-305

Submitted To:
Habibur Rahaman
Lecturer
Department of Management Studies
Rabindra University, Bangladesh

Submitted By:
Md. Sabbir Hossain
ID. 19030108
Session: 2018-2019
Department of Management Studies
Rabindra University, Bangladesh

Date of Submission: February 28, 2022


Meaning and Definition
Vouching is concerned with examining documentary evidence to ascertain the authenticity of
Entries in the books of accounts. It is an inspection technique used by an auditor to judge the
truth of entries appearing in the books of accounts.

Definitions of vouching
“Vouching means testing the truth of items appearing in the books of original entry”
-- J.R. Batliboi
“Vouching is an act of comparing entries in the books of accounts with documentary
evidence in support thereof”.
--Dicksee

Objectives of Vouching
 All the transactions connected with the business have been recorded in the books of
accounts appropriately.
 To verify all transactions recorded in the books of accounts by documentary
evidence.
 The vouchers support the entries whether they are legally valid, authentic, addressed
to the business and dated properly. To verify that no fraud or error has been
committed in transaction.
 The vouchers have been administered cautiously maintaining various stages of
internal checking system.
 To identify accuracy while totaling, carrying forward and recording an amount in the
account.
 To ensure distinction between capital and revenue items.

Vouching of Cash Transactions


How to vouch various cash receipts (Receipt side)
1. Cash sales: In vouching cash sales, cash register should be fully checked with carbon
copies of cash memos. Then, the auditor should verify the daily deposits of cash received in
the bank dates of the cash and the date on which the receipts are recorded in cash book must
be same.
2. Bills receivable: Bills receivable book may be verified because the various details
regarding the bills matured and discounted are available in it. Auditor should check the
amount received with the bank statement. A verification of the bills discounted should be
made.
3. Cash received from the debtors: The auditor should verify amount received from debtors
from the counterfoils or carbon copies of the receipt issued to the customers. All these
receipts should be serially numbered. Amount should be entered in the cash book on the day
when received. Discount allowed to customers should be authorized by a responsible officer.
4. Loans: While vouching the loans received, the terms and the conditions contained in the
agreement should be verified. If the loan is secured the security and the face has been
disclosed in the balance sheet.

Vouching of cash payments (Payment side)


1. Cash Purchases: Goods purchased are actually received by store keeper. Cash memos can
be compared with goods inward book to verify the goods received. Only the net amount
should be entered in the books.
2. Bills payable: Bills payable honored on the date of maturity and is returned by the payee
after receiving the payment. These bills should be cancelled after being paid. Bills payable
paid.
3. Payment to creditors: Should be examined with the receipts issued by the creditors. If the
payment is made in full and final settlement of account, the balance should be accounted for
as discount received.
4. Sale of Fixed Assets: Sale of fixed assets may be vouched with minute book of board of
directors, correspondence, agent’s sale account and sale contract. It should be seen that
proper account has been credited. It must be seen that sale of fixed assets has been sanctioned
by the authorized person or committee.
5. Sale of Investment: If the sales have been affected through a bank, the auditor should
examine the bank advice to know the various details. Sometimes the invesment is sold
through the broker. Broker’s sold note or commission should be examined to verify the sale
proceeds and commission charged by the broker. If the investments are sold at cum-dividend
price, auditor should see that proper apportionment has been made between capital receipts
and revenue receipts.

Vouching of Credit Sales


 The sales register should be examined with copies of sales invoices. The sale of
capital items should not be recorded in the sales book.
 Test check should be applied on the calculations made in sale invoices.
 The totaling and the castings of sales book should be verified.
 Sales Tax, duties collected thorough sales invoices must be recorded under separate
account
 It should be verified that all sales invoices are prepared on the basis of challans and
then sales invoices are entered in sales book and from there posted to their respected
accounts.
 Sales made in the current year must be recorded under that year and shall not be
treated as sales of subsequent year.
 All cancelled sales invoices must be kept together for verification by auditor.
 The statement of accounts should be verified by getting confirmations from the
customers.

You might also like