Meaning of vouching

What is the Meaning of Vouching?

In this blog, we discuss the meaning of vouching.

Vouching is one of the fundamental practices followed in an audit exercise. “To vouch” means to prove the correctness of something. And financial auditors need to vouch for the correctness of transactions recorded in accounting records by examining their evidence. 

Meaning of Vouching in Audit

According to Spicer and Pegler, “Vouching is the examination by the auditor of all documentary evidence, which is available to support the authenticity of transactions entered in the client’s records”.

Meaning of vouching:

In simple words, vouching is the act of examining vouchers in order to ascertain the accuracy of entries made in the books. It refers to verifying a transaction entered in the books of account with reference to documentary evidence in support thereof. The purpose is to ensure that transactions are true and that they are backed by appropriate evidence. Also, it checks the authority based on which an entry has been made in the client’s books.

To do vouching, a transaction is selected from an account and then the auditor goes backward through the accounting processing system to find out the source which supports that transaction. For instance, to vouch for sales, the auditor would see whether entries made in the sales book can be traced back to copies of sales invoices and whether sales invoices are arithmetically correct. Further, he would check whether the transaction has actually occurred in the period under audit and whether it is duly authorized.

What is a Voucher?

A voucher is nothing but any documentary evidence that supports the entries in the accounting system. It is any document that validates the entries in the books of account and helps to establish arithmetical accuracy.

A bill, an invoice, a receipt, goods received note (GRN), goods inward and outward register, stores records, counterfoil of a Cheque Book, salaries and wages sheets, counterfoil of pay-in-slip book, bank statement, delivery challans, legal agreements, bank passbook, a material requisition slip, copy of purchase order, minute book, partnership deed, trust deed, etc. are all examples of vouchers.

Types of Vouchers

From the perspective of an auditor, the large number of vouchers available in various audit situations can be roughly grouped as follows.

  • Not prepared by the entity: Vouchers that are not prepared by the entity under audit such as purchase invoices, insurance policies, receipts given by payees, etc. fall in this category. Such vouchers are generally considered a reliable source of evidence for the transactions represented by them.
  • Prepared by the entity: Vouchers that are prepared by the entity under audit but validated by independent sources fall in this category. Examples can be cheques prepared by the entity receipted by the payees. These are also considered reliable evidence.
  • Prepared and used completely within the entity: Vouchers that are prepared and used by the entity under audit fall in this category. The majority of vouchers are of this category and their reliability can vary from situation to situation. For example, if they are signed by some responsible officer and if there is a sound internal control system in place, their reliability increases.

Considering the nature of vouchers, another classification is possible which is as follows:

  • Primary vouchers: These are original vouchers in writing that are produced in support of a business transaction. For example, purchase invoices.
  • Collateral vouchers: Collateral vouchers, also known as subsidiary vouchers, are those which are produced in the absence of an original voucher. For example, carbon copies of cash memos in support of a transaction.

Meaning and Objective of Vouching

Vouching is a substantive audit procedure. Its objective is to verify the genuineness and validity of transactions. The transactions which are recorded in the primary books of account are verified by examining their corresponding documentary proofs.

The aim is not merely to ascertain that money has been paid away or received, but to also obtain an assurance that the transaction has been recorded in the proper account and that revenue or expense is properly allocated to the relevant accounting period. It further checks that all transactions have actually occurred and they pertain to the entity being audited. In addition, it helps to find out, as far as possible, that no entries have been omitted in the books of account.

Thus, with vouching, an auditor not only examines the arithmetical accuracy of the books but also their substantive accuracy and then makes a report thereon.

Examining a Voucher

As an auditor, some essential points to be considered while examining a voucher are:

  • The date of the voucher should fall within the accounting period. If it is not of the relevant period, it shouldn’t be accounted for in the said period.
  • The voucher must be made in the client’s name.
  • It should be duly authorized by designated personnel.
  • The voucher should be complete in all respects, i.e., it should comprise all the relevant documents that ought to be there for a transaction that has been entered into.
  • The amount of the voucher should have been recorded & posted in the correct account which clearly resonates with the nature of receipt/payment involved in the transaction.

Once vouchers are examined, each one of them should be rubber-stamped or initialed by the auditor so that it cannot be used again in support of another transaction or entry.

Vouching is the backbone of auditing

As stated earlier, vouchers are the primary documents relating to transactions. If the primary documents are wrong or irregular or if the transactions are not correctly recorded in accordance with them, the whole accounting statements, in turn, would become wrong or irregular. The auditor’s role is to see whether the financial statements are wrong or irregular, and thus, for this, examination of vouchers is imperative.

It is through vouching that an auditor satisfies himself about the genuineness of transactions recorded in the client’s books of account from where financial statements are drawn up. Unless the auditor examines the accuracy and authenticity of transactions, he cannot express an opinion on the fairness of overall financial statements and the business’s results.


Vouching is the essence of auditing because it not only checks arithmetical accuracy but goes much beyond to certify the genuineness of transactions contained in the client’s records. It ensures that no fake transactions are recorded.

Moreover, apart from genuineness, vouching enables an auditor to know about the regularity and validity of transactions in the context of the client’s business, the nature of the organization and its rules.

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