Page 181 - DCOM204_AUDITING_THEORY

Unit 9: Vouching

8. Bank Charges: Bank charges such as commissions, interest on overdraft and loan, etc, Notes
should be examined with the pass book of Bank. He should check the calculation of
interest.
9. Partner’s Drawings: Partnership Deed should be examined as to what is the maximum
amount and the time for which a partner can draw money and whether he is to be charged
any interest on drawings. He should vouch this entry with the Partner’s Drawing Book or
account and see that he signature of the partner is there against such entry.
10. Postage: The Postage book should be compared with the Cash book or the Petty cash book
and the balance of stamps in hand should be counted.

11. Petty Cash: There are greater chances of misappropriation of cash as thee are no voucher
for a number of petty payments. He should, therefore make an enquiry into the internal
check system of petty system of petty cash payments. The petty cash book should be
maintained on the imprest system. The auditor should count the petty cash balance on the
balance sheet date.
12. Directors’ Fee: As a general rule the directors of a company cannot claim any remuneration
unless the articles expressly provide for it. In any case they are not entitled to get any
monthly salary. He should examine the Articles of association to find out the fee payable
to the directors. He should also examine the minute book or the attendance registrar of the
Board of Directors or the resolution passed at a general meeting sanctioning such a payment
to ascertain the number of meeting attended by them, and to calculate the fee payable to
the directors.

13. Miscellaneous expenses, such as rent, rates, taxes, advertising, lighting, etc.: He should
examine the vouchers as usual and see that the expenditure is properly appropriated
between the periods where necessary.
14. Bank: During the course of the year, cash or cheques are sent to the bank for deposit or
collection and money is withdrawn from it frequently. Therefore such receipts and
payments are to be vouched. These transactions in the Cash Book should be compared
with the pass Book. Payments into the bank should be vouched with counterfoils of the
paying-in-book. With regard to the balance at the bank, reconciliation statement should
be prepared by the client to verify the balance. A copy of such a Reconciliation statement
should be retained by the auditor as his working paper for future reference.

Self Assessment

Fill in the blanks:
6. Voucher is a piece of paper or a document that confirms the truth of a happening and
confirm either the ....................................
7. Vouching also involves ............................ and ............................ relating to recording of
transactions.
8. The only evidence available on account of Receipts from Debtors is the ....................................
9. Interest received on account of fixed deposits in the bank account should be vouched with
the ....................

9.3 Vouching of Trading Transactions

Having examined the cash book, the auditor may now, proceed to check the trading transactions.
One of the objects of auditing is to check and prevent misappropriation of goods. The auditor

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