Is there any one from commerce?

Question

I have subject called Auditing, so plzz can any one tell me what is vouching n its definition.

Answer 1

Auditors use the word "vouching" to describe a type of evidence-gathering activity auditors apply in the substantive testing stage. Vouching is the process of the auditor matching documentary evidence (of an account balance or a transaction) with the details recorded in accounting records and provides evidence as to the completeness, validity or accuracy of an account balance or underlying class of transaction.

When an auditor requires evidence of the validity of an account balance or class of transaction, the auditor gathers evidence that details of the account balance, transaction or economic event recorded in the accounting records is supported by documentary evidence. i.e. the auditor vouches from the accounting records to the documentary evidence (or a "top down" approach). For example, the auditor obtains evidence relating to the validity of purchases recorded in a client's inventory records by vouching from details recorded in the inventory records (e.g. the supplier's name, date purchased, quantity purchased, and the amount of the transaction) to details on suppliers' invoices.

When an auditor requires evidence of completeness, the auditor gathers evidence that the account balance, transaction or underlying economic event referred to in the documentary evidence has been included in the accounting records. i.e. the auditor is said to have vouched from the documentary evidence to the accounting records (or a "bottom up" approach). (This "bottom up" approach is sometimes referred to as tracing rather than vouching.) For example, the auditor obtains evidence relating to the completeness of a client's inventory records by tracing details on the suppliers' invoices (e.g. the supplier's name, date purchased, quantity purchased, and the amount of the transaction) to the details recorded in the inventory records.

When the auditor requires evidence of accuracy, the auditor vouches from the accounting records to the documentary evidence, although with accuracy, the direction of the vouching is not as critical. For example, the auditor obtains evidence relating to the accuracy of a client's inventory records either by vouching from details recorded in the inventory records (e.g. date of purchase, unit cost) to details on the suppliers' invoices or by tracing details on the suppliers' invoices (e.g. date of purchase, unit cost) to the details recorded in the inventory records.

Documentary evidence has a variety of sources. Documentary evidence may be obtained independently of the entity, such as evidence of the market value of investments, or directly from the entity, such as evidence of the unit cost of inventory. Where it is obtained directly from the entity, the documentary evidence may be either externally sourced, as with a supplier's invoice, or internally sourced, as with standard cost calculations. Thus, the reliability of evidence gathered through vouching is a function of, inter alia, the source of the evidence.

Hope that helps you.

Answer 2

vouching is the priary face of recording a transaction it also serves as the primary evidence for accounting and auditing purpose