ASSIGNMEN
Group No: 02
NAME;
Fahad 38
Akash 36
Sohaib 34
Ali Asghar 33
Shaheer 28
CLASS;
BS Commerce 4th Regular
SUBJECT;
Accounting
PRESENTED TO;
Maam mehwish
Vouching
is an auditing technique used to verify the accuracy and authenticity of financial
transactions, accounts, and documents. It involves examining supporting documents, such as:
Invoices
Receipts
Purchase orders
Contracts
Bank statements
Main objectives of vouching are:
1. Verification of Transactions: To ensure that all transactions are genuine, properly
authorized, and in accordance with laws and regulations.
2. Validation of Accounts: To confirm the accuracy and completeness of account balances,
including assets, liabilities, equity, revenues, and expenses.
3. Authentication of Documents: To verify the authenticity and validity of supporting
documents, such as invoices, receipts, contracts, and bank statements.
4. Detection of Errors and Fraud: To identify and prevent material errors, irregularities, and
fraudulent activities, such as unauthorized transactions or falsified documents.
5. Compliance with Laws and Regulations: To ensure that all transactions and accounts
comply with relevant laws, regulations, and standards.
Techniques of vouching:
1. Document verification: Examining supporting documents such as invoices, receipts, and
contracts to ensure their authenticity and accuracy.
2. Comparison with external evidence: Comparing internal records with external evidence
such as bank statements, canceled checks, and vendor invoices.
3. Confirmation: Obtaining independent confirmation from third parties such as vendors,
customers, or banks to verify account balances and transactions.
4. Reconciliation: Reconciling internal records with external statements such as bank statements
or vendor statements.
5. Physical inspection: Physically inspecting assets such as inventory, equipment, or property to
verify their existence and condition.
6. Observation: Observing physical processes and operations to ensure they are consistent with
financial records.
Vouching procedure
is a systematic approach used by auditors to verify the accuracy and
authenticity of financial transactions and accounts. The following are the steps involved in the
vouching procedure:
1. Selection of transactions: Identify a representative sample of transactions to be verified, such
as purchases, sales, or journal entries.
2. Obtain supporting documents: Gather all relevant supporting documents, such as invoices,
receipts, contracts, and bank statements.
3. Verify document authenticity: Check the documents for authenticity, ensuring they are
valid, complete, and not altered.
4. Verify transaction details: Compare the transaction details on the documents with the
financial records, ensuring accuracy and consistency.
5. Verify authorization: Check that transactions have been properly authorized by management
or other authorized personnel.
Voucher
is a certificate or document that either allows you to purchase something or proves
that you paid for something ¹. Some types of vouchers include ²:
Here are the types of vouchers in detail:
1. Debit or Payment Voucher: Used to record payments made to suppliers, vendors, or
employees. It supports the debit entry in the accounts payable or expense account.
2. Credit or Receipt Voucher: Used to record receipts from customers, investors, or other
sources. It supports the credit entry in the accounts receivable or revenue account.
3. Supporting Voucher: Used to support or justify a specific transaction or entry in the
accounts. Examples include invoices, receipts, bank statements, and purchase orders.
Vouching:
Vouching is the process of verifying and examining supporting documents, records, and
evidence to confirm the accuracy, authenticity, and validity of financial transactions, accounts,
and statements. It involves a detailed examination of individual transactions, invoices, receipts,
bank statements, and other documents to ensure that:
Transactions are genuine and properly authorized
Amounts are correct and accurately recorded
Dates are accurate
Accounts are properly classified and recorded
Financial statements are presented fairly and in accordance with applicable standards
Audit
An audit is an independent examination and evaluation of an organization's financial statements,
accounting systems, and internal controls. The purpose of an audit is to provide assurance that
the financial statements are presented fairly and in accordance with applicable standards, and to
identify any material errors, fraud, or irregularities.
An audit involves a comprehensive review of:
Financial statements and records
Accounting systems and processes
Internal controls and governance
Risk management and compliance
Financial reporting and disclosure
Cash Journal:
A cash journal, also known as a cash book, is a specialized journal used to record
and manage cash transactions, including:
Cash receipts (deposits, income, etc.)
Cash payments (expenses, withdrawals, etc.)
Cash transfers (between accounts or funds)
Purchase Journal:
A purchase journal, also known as a purchase daybook, is a specialized
journal used to record and manage purchase transactions, including:
Purchases of goods, services, or assets
Credit purchases
Debit notes and credit notes
Sales Journal:
A sales journal, also known as a sales daybook, is a specialized journal used to
record and manage sales transactions, including:
Sales of goods or services
Credit sales
Debit notes and credit notes
Journal:
A journal, also known as a general journal, is a book or digital record used to record
and manage all financial transactions, including:
Asset, liability, and equity transactions
Revenue and expense transactions
Gains and losses
Adjustments and corrections
