VOUCHING

·         VOUCHING

AUDITING

·         MEANING OF VOUCHING

·         IS CONCERNED WITH EXAMINING DOCUMENTARY EVIDENCE TO ASCERTAIN THE AUTHENTICITY OF ENTRIES IN THE BOOKS OF ACCOUNTS. VOUCHING IS A TECHNIQUE IN WHICH AUDITOR VERIFIES AUTHENTICITY AND AUTHORITY OF TRANSACTIONS RECORDED IN THE BOOKS AND ON THE BASIS OF WHICH SUBMITS A REPORT,INDICATING THE ACCOUNTS ARE CORRECT,FREE FROM ERRORS AND COMPLETE.

·         J.R BATLIBOI,” VOUCHING MEANS TESTING THE TRUTH OF ITEMS APPEARING IN THE BOOKS OF ORIGINAL ENTRY.

·         OBJECTIVES OF VOUCHING

1.       TO ASCERTAIN THE RECORDED TRANSACTIONS ARE PROPERLY CONNECTED WITH THE BUSINESS.

2.       TO ASCERTAIN THAT RECORDED TRANSACTIONS ARE ADEQUATELY SUPPORTED BY DOCUMENTARY EVIDENCE

3.       VERIFICATION OF AUTHORITY AND AUTHENTICITY OF TRANSACTIONS RECORDED IN THE BOOKS OF ACCOUNTS

4.       TO ENSURE THAT PROPER DISTINCTION HAS BEEN MADE BETWEEN CAPITAL AND REVENUE ITEMS

5.       TO ENSURES  THAT VOUCHERS PERTAINING TO FINANCIAL YEAR UNDER AUDIT HAVE BEEN POSTED IN THE BOOKS OF ACCOUNT

·         SIGNIFICANCE OF VOUCHING

1.       VOUCHING IS THE BACKBONE OF AUDITING. IF VOUCHING IS DONE INTELLIGENTLY AND FAITHFULLY IT WILL HELP IN ESTABLISHING RELIABILITY OF PROFIT AND LOSS ACCOUNT AND BALANCE SHEET.

2.       WHERE EFFECTIVE INTERNAL CONTROL SYSTEM EXIST THE AUDITOR APPLY TEST CHECKS AND SCIENTIFICALLY SELECT NUMBER OF TRANSACTIONS AND VOUCH THESE TRANSACTIONS IN DEPTH.

•    VOUCHING AND ROUTINE CHECKING

1. ROUTINE CHECKING IS SIMPLE CHECKING INVOLVING CHECKING OF EACH CARRY FORWARD,POSTING TO LEDGER,BALANCING OF ACCOUNTS.
2. VOUCHING IS BROADER TERM AND INCLUDES ROUTINE CHECKING.
3. ROUTINE CHECKING IS A MECHANICAL DEVICE AND VOUCHING IS AN INTELLIGENT CHECKING AND DONE WITH THE HELP OF DOCUMENTARY EVIDENCE.

·         THE VOUCHER

1.       A TRANSACTION IS RECORDED IN THE BOOKS ONLY WHEN A DOCUMENTARY EVIDENCE IS AVAILABLE TO SUPPORT THE TRANSACTIONS. IT MAY BE RECEIPT,COUNTERFEIT OF RECEIPT,RESOLUTIONS PASSED IN A MEETING,CASH MEMO,PAY IN SLIP,PURCHASE INVOICES,SALES INVOICES,MINUTES OF A MEETING. ALL SUCH DOCUMENTARY EVIDENCE ARE KNOWN AS VOUCHERS.

·         TYPES OF VOUCHERS

1.       PRIMARY VOUCHERS: WHEN A WRITTEN EVIDENCE IS AVAILABLE IN ORIGINAL,IS KNOWN AS PRIMARY VOUCHERS. FOR EXAMPLE CASH MEMO,PURCHASE INVOICE.

2.       COLLATERAL VOUCHERS:-IN CERTAIN CASES,EVIDENCE IN ORIGINAL ARE NOT AVAILABLE.COPIES OF SUCH EVIDENCE ARE MADE AVAILABLE FOR THE PURPOSE OF THE AUDIT.CARBON COPIES OF SALES VOICE,COPY OF RESOLUTION.

·         NATURE OF TRANSACTION VOUCHERS AVAILABLE

1.       CASH PAYMENTS: CASH MEMOS,PAY SHEET AGREEMENTS,DEMAND NOTES

2.       FOR CASH RECEIVED: CARBON COPIES OF RECEIPT,COUNTERFOIL OF RECEIPTS,ISSUED,CONTRACTS

3.       FOR PURCHASES: INVOICES,COPIES OF ORDERS AND CORRESPONDENCE,GOODS INWARD REGISTER

4.       FOR SALE:- GOODS OUTWARD REGISTER,ORDER,COPIES OF INVOICES

5.       OPENING JOURNAL ENTRIES,LAST YEAR BALANCE SHEET ENTRIES,BILL OF PAYABLE AND BILL OF RECEIVABLES

·         POINTS TO BE CONSIDERED WHILE VOUCHING

1.       VERIFICATION OF AUTHENTICITY OF THE TRANSACTIONS,ACCOUNT AND AMOUNT AND CLASSIFICATION OF ACCOUNT

2.       ALL VOUCHERS SHOULD BE ARRANGED SERIALLY

3.       VOUCHER CHECKED SHOULD BE TICKED/STAMPED OR SPECIAL MARKS

4.       AMOUNT SHOULD BE SHOWN IN WORDS AS WELL IN FIGURES

5.       RECEIPT SHOULD INDICATE THE PERIOD FOR WHICH PAYMENTS HAS BEEN MADE

6.       EVERY VOUCHERS SHOULD BE CERTIFIED BY THE RESPONSIBLE OFFICER

7.       WHILE VOUCHING,THE AUDITOR SHOULD NOT TAKE HELP FROM THE CLIENT’S STAFF

8.       SHOULD SEE PROPER ACCOUNT IS DEBITED OR CREDITED AND ALSO SEE THAT EXPENSE PERTAIN TO BUSINESS

·         MACHANISED ACCOUNTING

·         VARIOUS MACHINES ARE USED TO FACILITATE RECORDING AND PRESENTING ACCOUNTING TRANSACTIONS AND ALSO USED TO APPLY FOR CONTROL AND CHECKS.

·         BEFORE INTRODUCING MACHINES,AUDITOR SHOULD BE CONSULTED .

·         ADVANTAGES:-

1.       REDUCTION OF CHANCES OF ERRORS

2.       HELPS TO REDUCE TIME AND COST OF PERFORMING TIME

3.       MORE NEAT AND LEGIBLE

4.       REPRODUCTION OF PAST RECORDS

5.       EASY TO MAKE FINAL STATEMENTS

6.       EASY TO TAKE AS MANY COPIES AS YOU WANT TO TAKE

•    DISADVANTAGES

1.       ONCE AN ERROR IS THERE ,IT IS DIFFICULT OT LOCATE

2.       NOT ADMISSIBLE AS EVIDENCE

3.       WRONG DATA WILL PRODUCE WRONG RESULT

4.       ENTRIES ARE NOT SUPPORTED BY NARRATION

·         MECHANISED ACCOUNTING AND AUDITOR

1.       THE PROCEDURE OF THE AUDITING IS SAME

2.       VERIFICATION OF THE RECORDING OF TRANSACTIONS AT INITIAL STAGE

3.       A THROUGH SCRUTINY OF INTERNAL CONTROL

4.       CERTIFICATES FROM THE RESPONSIBLE OFFICER THAT MACHINES USED WERE IN ORDER

5.       FOR THE COMMON MISTAKE OF MISCODING HE SHOULD TAKE APPROPRIATE STEPS