What is Vouching in Accounting? Definition and Importance

Vouching is the act of examining the documentary evidence (called vouchers) supporting each financial entry in the account books to ensure it is:

1. Genuine (real transaction, not fabricated).
2. Authorized (properly approved by the management).
3. Correctly recorded (in the right account and right amount).

A Voucher is any documentary proof supporting a financial transaction:

• Cash receipts and payment receipts.
• Invoices and bills.
• Bank pay-in slips and cheques.
• Salary registers.
• Contracts and agreements.

The famous auditing expert L.R. Dicksee called vouching the 'backbone of auditing' because:

• It is the most fundamental verification technique.
• It detects fraud, embezzlement, and misappropriation of funds.
• All other audit procedures build upon a solid foundation of vouching.

1. The auditor selects each debit/credit entry from the accounts.
2. Traces it to the corresponding voucher (receipt/invoice).
3. Checks: Date, amount, authorization signature, and correct account head.
4. Marks verified entries to avoid double-checking.