Vouching
This query is : Resolved
07 October 2013
how to learn vouching and verifying in audit for ipcc??
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.
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 =)
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.
regards,
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.
regards,
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