07 October 2013
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 occured/genuine. This is generally a step in assurance. Or say, the company made a purchase.. these can be traced to purchase order, invoice etc.
07 October 2013
As for verification, auditors are normally required to see that the supporting documents are verified whilst auditing.Verification is normally done by a nominated person in the company which involves reviewing, inspecting and checking to ensure that the documents conform to specific requirements. On the other hand, there's another physical verification which is done by the auditors themselves. This is an auditing procedure whereby auditors inspects the actual assets of the company to make sure that they are the same with the written records.It is a substantive audit procedure which deals with examination of BALANCE SHEET transactions/items whether they are assets or liabilities are properly stated. Normally we do this by selecting samples or in some audit firms, setting a scope. For example, we do stocktakes =)
07 October 2013
I would suggest, try to understand instead of learning such topics.
Verification is made on the basis of vouching. So, verification is a part of vouching. Even though they have some differences which are as follows:
1. Meaning Verification is the act of checking title, possession and valuation of assets but vouching is the act of checking the records with the help of evidential documents.
2. Nature Verification is specially related to the assets and liabilities but vouching is related to all the accounting documents.
3. Person Generally, assistant staff or articled assistants performs the work of vouching but auditor himself performs the work of verification.
4. Time Vouching is made at the beginning of auditing but verification is made at the end of auditing or at the time of checking balance sheet.
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