Page 174 - DCOM204_AUDITING_THEORY

Auditing Theory

Notes 4. A careful examination of all original evidence such as invoice receipt of correspondence
minutes, contracts etc.
5. Vouching is very useful in proving the accuracy of the entries in the books of accounts. It
also indicates about that transaction, which is omitted from the books of account.

Did u know? Vouching is called the essence of auditing. So audit is not possible without
vouching. The object of vouching is to find out the accuracy of the entries appearing in the
books of accounts and detect that no entry has been omitted from the books of account.

9.1.2 Procedures of Vouching

The following are the procedures to vouching:
1. Reading out: The vouching is a task of the auditor. The junior audit can read out the
contents of the vouchers. He can inform the senior auditor about the data name of
organization, number of voucher and amount of vouchers.

2. Comparison: The senior can head the contents called out by junior auditor. He tally each
and every item stated in the voucher with entries in the books of accounts. Thus comparison
is a part of vouching procedure.
3. Ticking: The senior auditor can use various ticks or symbols to clear the items checked.
The ticks may be an abbreviation of words. Such ticks or symbols may differ from auditor
to auditor because these are code words.
4. Stamping: The senior auditor instead of signature or initials he can use stamps for checking
the vouchers can use the rubber stamps. The rubber stamp may have the wording checking
and cancelled on it.

5. Signatures: The senior auditor can vouch the entries with the help of vouchers. He can put
his signature or initials on every voucher for safety measures. The signed vouchers cannot
be presented again for another entry.
6. Query: The voucher may be missing. The entries may be doubtful due to over writing and
erasing. The audit staff can make the word “Q” against such entry. This entry is recorded
in working papers.
7. Management: The audit staff can be giving sometime to the management for clearing the
objections. The doubtful entries are handed over in written form. The management can
examine the record in detail.

8. Reply: The management may reply after one or two days about the doubtful entries. The
auditor can examine the reply of the managers. The auditor can judge whether the reply is
right or wrong.
9. Clearance: The audit staff can clear the query for which proper answer is made available.
The auditor may not be satisfied with the answer of objections. He can inform the
management about this query.

10. No Satisfactory: The auditor may reject the unsatisfactory reply. He has skill, training and
experience. He can use all available means to test the truth. He can note down poor
clarification in working papers.

168 LOVELY PROFESSIONAL UNIVERSITY