Introduction
Vouching is a process of examining the financial transactions of the business in order to verify the accuracy and authenticity of the records. It includes inspection of receipts, invoices vouchers and bank statements to detect errors and frauds in the books of accounts. It helps to simplify the audit process.
Objectives Or Importance Of Vouching
The main objectives or importance of vouching can be highlighted as follows:
1. To Ensure Accuracy And Genuineness
Vouching is the act of examining the records of business transactions. It helps to ensure the genuineness and accuracy of the entries.
2. Detection Of Errors And Frauds
It carefully examines each and every entries and documentary evidence in the books of accounts. So, it helps to track the errors and frauds committed in the accounting process.
3. To Discover Missing Transactions
Another objective or importance of vouching is that it helps to discover missing or unrecorded financial transactions. Auditor checks all the vouchers and related documents to ensure the completeness and correctness of postings made by the accounting personnel.
Vouching ensures the validity and authenticity of supporting documents such as bills, invoices, bank slip, receipts, minutes etc.
Also Read
5. Base For Auditing
Vouching is very important because it provides a base for auditing. It simplifies the work of final audit.
6. Assessing Compliance
Vouching ensues that financial transactions are recorded as per the accounting rules, standards and legal requirements.
