Significance of Vouching
Vouching is the act of checking evidential documents to find out errors and frauds and to know the authenticity, accuracy, and reliability of books of accounts. It is known as the evidence for the support of a transaction in the books of account. It tests the truth of items appearing in the books of original entry. Valuation is not included in vouching.
Vouching is a sort of preliminary work, which forms an important part of audit work. Thus, it is important for an auditor due to the following reasons:
Vouching is the Backbone of Auditing
Main aim of auditing is to detect errors and frauds for proving the true and fairness of results presented by income statement and balance sheet. It is only a way of detecting all sorts of errors and planned frauds. So, it is the backbone of auditing. With a broken backbone, a human being can neither stand nor walk properly. So, it is the backbone of auditing.
Vouching is the Essence of Auditing
Auditing not only checks the accuracy of books of accounts but also checks whether the transactions are related to business or not. All the transactions are performed after the prior approval of concerned authority or not, transactions are real or not because an accountant may include fictitious transactions to commit frauds. All these facts can be found with the help of vouching. It is different from simple routine checking as vouching is much more accurate than the latter. So, vouching is essential for auditing.
Vouching is Important to See Whether Evidence are Correct or Not
An auditor checks the books of accounts to detect errors and frauds. Frauds may be committed to presenting duplicate vouchers. All the small and big amounts of frauds can be detected with the help of vouching. If vouching is not done then the claims of the auditor will not be considered to be accurate and fair. So, all the evidential documents and records are to be checked carefully and in detail by an auditor which is the scope of vouching. By using vouching, frauds that are difficult to detect can be discovered.
Therefore, it can be said that vouching is the heart of auditing because, without the work of vouching, the work of auditing cannot be performed.
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