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Chapter

· · A b sJ r ·a c t .

o:~ Meaning and defini ·

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. •· <>' . Features of vouchi

-~f.'. · o;:,·Objectives'~f ~Ouchi
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q . Types of vouchers m ac .
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From exam ination poin t view . . ,.. : •
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/' ·Define vouching. What are ttie features of vouching ..· .
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," is a component of an aud it

Vouching, widely recognized as "the backbone of auditing
's book of accounts. When an
seeking to authenticate the transactions recorded in a firm
fied by .,presenting ~v ant
accounting transaction is v~ ed , it is tested and veri
documentary·evidence.
Vouching ensures that all the entries in the books of acco
~c e, including invoices, receipts, and others. Vouchin
non-business transactions, thus helping auditors to ensure
unts come with the relevant
g does not take into account the
that all transactions in a firm's
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. 6.2
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vOIJt~•
_:: book of ~c~ounts are bus~ess-r~lated. Auditors confirm ~at the a~ounts m~ntionect. ~~
1

; transaction are truthful, d1sclosmg the nature of a transaction, and its authorization. 1lt ~q~~
.J Voucher is known as the evident for the support of a transaction in the books of
It may be bill, receipts, requisition form, agreement, decision, bank paying slip etc accolltit.
The act of examining documentary evidence in order to ascertain the accuracy of
in the account books is called "Vouching". Vouching is a technical term which ref entr1~
. . ers to
inspection by the auditor of documentary evidence supporting and substanr . tn~
iatin
transaction. gq
Lawrence Dicksee had d~fined vouching as an act of comparing entries in the b
· · Ook8
accounts with documentary evidence in supp~rt thereof. . . 01

R<miiJd__A_! Irish has defined"7ouching a~ ~'technical ter1:11 which re_f~JQ.!btiusR .

by the auditor of d~~nt~ry ;~!~ence SU1?£Q!~and substa~on~~n
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~spection of
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~~~~aµ,9.~/:9.f :'!~tJ!ansactions
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of a

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to satisfy an
·. aud1tor._ that ._such :tr;ms~ctions·~ are it) ,prd~r( h~ve, ., be~r,1) prope_rly~,authorized and are
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· ·correctly recorded m ilie books. ?ki ·-~ >-\,_., ~ ,,,·•.~:ff!· .:\i .,-\, ?}';>'f::/,Lf'U:· ,:)':-J1t?,,:;. :,,,?>
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Ifs~5.s .-_?£ vouching
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FEATURES.OF VOUCHING;:\;t~::;;ff'f;',!\\:~.:-: t '.<:~ _.,....,...._,.,..,._......,..,._ _ _ __

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y Important aspect of auditing: Vouching is
regarded as the very important_aspect ;of ,
auditing because the concept ~f evidence·is
fundamental to auditing and . all audit
teclriques and procedure~ are. d~rived
from . it. It helps the auditor in
understanding .the types of evidence
available, in collecting it by means of
. various audit techniques and in evaluating
its ad_equa~y. and reliability to supp~rt
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accounting e_ntries. , ,. '. )

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- "Areliminary work of auditing·· v ouch'mg ts
. b th
of prime importance. It should e e
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first step before_ domg
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other work. It should be clearly home in mind that no
,
unt of routine chec,•: mg can rev ,.1 . · · le ·
. errors of pnnc1p
a.LU ea senous d1screpanc1es,
and carefully _planned f~u v-Js. Such checking can only detect clerical and minor
errors. There 15 no denymg th~ fact that serious discrepancies, errors of principle
and ~lever frauds can be de_tected only through proper vouching .. Therefore, it is
very 1~po~tant that the auditor should undertake vouching of each and every item
appear111g m the books of accounts with great care.
3("lt supports and sub~tantiates a transaction: Vouching is the only tool which helps
to ~ m a c h o n . It is through vouchingthat the auditorcan·satisfy himself
· as to the accuracy, authenticity and completeness of the transactions recorded in
the books of accounts and only then he can certify that the financial statements
exhibit a true and fair view of the results of operations and state of affairs of the
business.
I·. Ensures correctness: Vouching provides evidence for the relevance of a
transaction. It ensures that there are no material misstatements and the transactions
are correct. Due to this, auditor can ensure the reliability and accuracy of data.
s.A:xamination of entries: The act of examining documentary evidence in order to
ascertain the accuracy of entries in the account books is called "Vouching". So it is
merely examination of entries by documentary, by other evidences such as
vouchers, minute books, correspondence, pay-in-slips, receipts, cash book, etc.
~ Only business transactions are recorded: Sometimes, transactions are performed
for in.2!_yidua.L.p,mpose but p~nt is ~ad~Q.l!t cif business. Such transactions
should n ~ d in account of business. If such transactions are recorded, we
can find it with the help of vouching. To know the real profit or loss of business,
such transactions are to be separated. Vouching does not take into account the non-
business transactions, thus helping auditors to ensure that all transactions in a
firm's book of accounts are business-related.
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0 CTIVES OF VOUCHING
Main objective of vouching is to find out the regularity or irregularity of transactions,
frauds and errors. Regularity means maintaining record and perfo~ming the work
compliance with the rules, regulation and law. But irregularity means doing the work
crossing to the line of rules, regulatibn and laws.
Some of the major objectives of vouching are given below:
1:-To Detect Errors and Frauds: All transactions are to be supported by evidence.
Each document sho 1ld be proved by authorized authority. With the help of
1

vouching we can detect errors and frauds by verifying each transaction. Planned
fraud can be detected through vouching.
 Vouc~,

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1 d ry transaction is checked a d ~
2 ('fo I(noW the Truth of Account: Eac, an eve . n ratifi
. on the basis of support document. So, we can easily knoW the truth of account. eq
3yTo Find the Unrecorded Transactions: E~d every _trartgction is c~ an,
~
ratified on the ba~e nt. Vo98 helps to {ind out _the ~ ~
tr t'ons If any voucher is found unrecorded, auditor can sugg 1or
1rossmg ansac 1 . • est 0
¥1'record such transactions.
Know Thal all the Transactions Are Authorized: If the transactions are lllad
on0 the consent of concerned authority, such. transaction~, are known
. as authonzed. e
transactions, If transactions are not authorized, such transactions can be fictiti 0
transactions. So, such fictitious transactions can be found with the he]p ~s Of

vouching. .
s. To Know Thal Only the Business Transactions Are Recorded: Someti
transactions are performed for individual purpose but payment is made 0 01 ;es,
business, Such transactions should not be recorded in account of business. If su
transactions are recorded, we can find it with, the help of vouching. To know
real profit or loss of business, such transactions·are to be separated.
;h
e

- The following points highlight the top two typfs of voucher in accounting. The ty

1. Primary or Accounting Vouchers 2. Supporting Vouchers.

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Types of Vocher
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Accounting Voucher
Supporting Voucher

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Non-cash or
I
Outside Inside
Cash
Voucher Transfer Voucher Voucher Voucher
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Credit Vouchers
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Debit Vouchers
Prepared by
third P!l'lles
Prepared by
firm itsejf

for for
Cash Receipts Cash Payments
•,

Voucher 'l"ff
.a.,pe # 1. Accounting· Voucher
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These vouchers •are prepared on• the baSJS
. of supeortin / .' . .
or the accountan
-
t of the organisation and which . are g vouchers
= . by the accounts
........;:;.;.;, clerk
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c~unters1gped by an authorise~
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accounts. These
· . atotY· As soon as it is signe d the same is recorded in the books of
si~r s are made both for cash and non-cash transactions.
votl
'fhUS, accounting Vouchers are of two types:
(a) · Cash Voucher and
(b) Non-Cash Voucher or !rans fer Voucher.
(a) cash Voucher:
cash payments.
cash vouchers are the docum entar y evidence of both cash receipts and
;\gain, Cash Vouchers are of two following types, (i) Debit Vouc
her, and (ii) Credit Voucher.
(i) D!!W Voucher:
vo~chers ~re
o~c her s are the do~u ment aq, e;rulence of c~ay men ts. Th~se
ess including capital
irepared to keep records of various cash Efil'.!!lents relating to the busin
purchase of Plant by
~ve nue payments. For example, paym ent of Wages and Salaries,
cash; Purchase of good s for cash, etc.

contents of Debit Vouchers:

The following information are normally available from a debit voucher:
(a) Names and Addr esses of the Parties;
(b) Date of prepa ring the voucher;
(c) Voucher Number;
(d) Amount of the transaction;
(e) Heads of Account;
(f) Signature of the perso n who is prepa ring the voucher;
...... - - - ·- - ·-

(g) Authorised signatory;

(h) Narration i.e., short description of the transaction and
(i) Number of suppo rting Vouchers.
The format of a Debit Voucher is presented:
Debit Voucher
M/s New Central Book Agency (P) Ltd.
✓ Bl~, Chlntamonl Das Lane, Kolkata 700 009

J
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Voucher No: P-103
Data : 1.5.2010

i ·l 1
Debit
Amount .

Office Equipment Ale

-Being Office Equipment
11 i purchase, Cash Memo No.90
Total
S/d
Authorised Signatory Accountent
 Note:
1. If the amount of transaction exceeds f 500 a revenue stamp valued Re 1. shou
ld

a~ .
~
re .
2. As the supporting voucher (i.e., Cash Memo No 90) is available, hence, the 1
portion of the debit voucher is not required. ~ l>t

(ii) Credit Voucher:

hers
Credit vouchers are the documentary evidence of Ca~ receipts. These vouc
of are
prepared to record various cash receipts relating to the business. Examples cred·
re . it
vouchers: Sale of Goods for cash; Sale of fixed assets or investment for cash; Cash ce1v d
, e
from Debtors, etc.

Contents of Credit Voucher:

The following information are usually available from ~ credit vo~cher:
(a) Date of preparing the voucher;
(b) Voucher Number;
(c) Amount of the transaction;
(d) Heads of account;
(e) Signature of the person who is preparing the voucher;
(f) Authorised Signatory;
(g) Narrations, i.e., short description of the transaction, and
(h) Number of Supporting Voucher.

The format of a Credit Voucher is presented:

Credit Voucher
• . . . . ... I . , • .
-. . .'

·, . · Mis New Central Book Agency (P) Ltd. · · r·· .•. .·

.. 811, Chlntamonl Oas ·: · ·
La!)e, Kolkata 700 009 : :. · ·:' ··; Date: ·
· · ,,,. , _ / . · · ·· · 1.s.2010
Voucher No. 358

.' . ~_- ·...-· . :- . .- - · · -: · ·:.· · : · · -:/ t>

Credit , '
Interest Ale ·
· · ·: Beingthetnterestreceivedincash·, · ,._,_·· ~ ,· ··;/{ '· ·-:·<._·.·· .,. · ·
'_:, · \~
Vf~e Bill No. 458 · ~-- . >, ··l :./. ,(: ·.. ·
. Total ,. ..• ; . ;· . : . . -. : -
.·. ,
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· Sid - Sid
Authorised Signatory Accountant
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vo~r;p:; .
· of~S.ff. OR TRANSFER VOUCHER: .
fl . ·..cash or Transfer vouchers are the documentary evidence of non-cash winsactions. 1
N~e rs are pr!_e,ared to re~ord the nolt.£~§h t!:.ans.~ ions of the business. Examples
fli~ -cash vouchers are: G-2.QQ§-filllc l ~dit; Sale of Fixed Assets or Investment ori
~ Wri_!lng-<>ff depreciation or Bad Debts, Returns Inward, etc.
r ts of Non-Cash Vouchers:
coo.teO
(a) Name and Address of the parties;
(b) Date of preparing the voucher;
(c) voucher Number;
(d) .Amount of the transaction;
(e) Heads of Account;
(f) Signature of the person who is preparing it;
(g) Authorised Signatory;
(h) Narration, i.e., short description of the transaction and
(i) Number of Supporting Vouchers.
The format of a Non-Cash or Transfer Voucher is given:
Non-Cash or Transfer Voucher
·· •,. · :.t'' ••· ~• _New Central Book Agincy ':'- · ·•-. .•
','i.s-' 8/1 C .

. •~· l ' ·'

ccountant ":'f

her Type # 2. Suppo rting Vouchers:

upporting Vouchers are the documentary evidence of business transactions which have
p,ened.

(i~ External Supporting Vouchers; and

(ii) Intt?rnal Supporting Vouchers.
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Vo11c~1
I
(l) ltaternal Supporting Vouchers:
These vouchers are prepared by the third Qarties who are associated with the
finn.
For example: -
(a) Debit Note Received;
(b) Credit Note Received;
(c) Purchase Invoice Received from the Supplier of Goods, etc. and
(d) Cash Memo Received from the Sellers, etc.
The format of a Supporting Voucher is presented:
Supporting Voucher
Stat ione ry Rec eipt
Sf. Amount
1, . 100.00
', . ., ~ , dozen , ,: 60,00
2.
1 Dozet'\ B1:111 r:~, . ~I) . · , 1 ·.
100.00
8. 1oo Pcs Execufj. · . ·. ·. ·· : " : Sid.: ·