VOUCHING

.

By R.Nithin Raja

Contents: Introduction to vouching Payment To Creditors Travelling Expenses Salaries and Wages Loan taken from bank on Security Directors Travelling Expenses Insurance Premium Bills Receivable Interest from Party for Loan Given Foreign tour expenses by Managing Director

VOUCHING IS THE ESSENCE OF AUDITING

“TESTING THE TRUTH OF ITEMS APPEARING IN THE BOOKS OF ORIGINAL ENTRY”

Verification of Entries in the BOA by examination of Invoices, Dr and Cr notes, Statements, Receipts etc.,

In other words vouching is the “Back bone of Auditing” Basic Objectives of Vouching:- Transactions recorded in BOA• Are in Order• Have been Properly Authorised• Correctly Recorded

Payment to Creditorso Receipts Issued by the vendoro Vouchers supported by Billso Where the amount of Invoice differs from the payment -• Short Payment as full Settlement• Excess Paymento Periodical Statement of Accounto Minutes of Board Meeting

Travelling Expenseso Rules framed by the company for Re-imbursemento Authorised by Proper Officialso Vouch copies of Air/Railway tickets and Hotel billso Foreign travelling expenses - Authorization by Board or

Partnero Traveling allowance given as Expense-Check Calculationso Vouchers supported by full details of Expenses.o Extraordinary type of travelling - Authorised by

Responsible person.

Salaries and Wageso Employee data – Name, Wage rate, Attendance record etco Arithmetical Accuracy of pay roll Functiono Acknowledgement of Employeeso Deductions of TDS,PF etco Retired employees not included in Pay rollo No dummy workman has paid Wageso Bank Statemento Unclaimed Wages

Loan taken from Bank on Security

o Loan agreement between Entity and banko Properly authorised by Competent Authorityo Purpose for which Money Borrowedo Nature of Security Offeredo Confirmation of Loan balance from Banko Interest charged by the Banko Accounted as “Secured Loan”

Directors Travelling Expenses

o For attending Board Meetingso Resolution fixing travelling expenses per meetingo Personal expenses are not includedo Voucher supported by all the detailso Foreign travelling expenses-Resolution by BOD, Permission of

RBI, Bill from Company’s travelling agent, Doc.in respect of frgn.exchange

Insurance Premiumo Policy or the cover note or the receipt of renewal Premiumo Statement showing all the details of Policyo Whether the insurance is adequate or noto Date of maturity and amount of Premiumo Prepaid Insurance accounto If policy is not renewed-Reasons for thato Authorised by a reasonable person

Bills Receivableo Receipt of money in cash book compared with Bills

Receivable bookso Bank Statement o Bills became due but amount not receivedo Bills dishonouredo Bills discounted with bank-contingent Liability

Interest for Loan Given to Parties

o Cheque received deposited in to bank and interest account is credited

o Bank Statement o Counterfoils of carbon copies issuedo Agreement - Terms and Conditionso Amount of Interest Credited separately

Foreign tour expenses by Managing Director

o Board sanctions for foreign tour.o Purpose and Relevance of tour.o Sanction of RBI for release of foreign Exchange.o Expense statement and tour report submitted by MD on his

return.o Expense statement is in conformity with the sanction of

board.o Special attention for Personal exp included in statement.