What is the importance of vouching in auditing?

vouching is the verification of entries in the books of accounts by examination of documentary evidence or vouchers such as invoices, debit, and credit notes.




it means testing the truth of items appearing in the books of original entry.

in vouching we try to verify if the numbers in ledgers reflect the real transaction and they are not just numbers.

therefore in vouching the auditor trace the transaction from the financial statements of books of accounts to supporting documents such as receipts and invoices.




for example if in the books of accounts an asset such as a car is recorded the auditor will trace the amount of the recorded car to documents that support the purchase of cars such as car registration cards and import documents to verify if the car was actually bought and is actually owned by the audited entity.

The following is the importance of vouching in auditing

  • It helps the auditor to verify if the transaction in the books of accounts or accounting ledgers actually occurred. by vouching auditor tries to confirm the accuracy of the assertion made by the management of the audited entity that the transaction in the financial statements actually occurred. without vouching the auditor may end up accepting the transaction that is fictitious or accepting the assets that do not exist




  • vouching helps the auditor to discover fraud and errors in the financial statements and hence help the transaction to be more accurate
  • vouching help the auditor to remove overstatement of assets in the financial statements by detecting assets that have no supporting evidence.

despite the importance of vouching stated above vouching as the method of audit evidence collection has the following limitations

  • it helps the auditor to detect overstatement but it does not help in verifying the completeness of transactions,
  • it does not verify the existence of the balance shown in the financial statements. through vouching the auditor may know that the assets shown in the financial statements were actually bought by the entity however the auditor may not verify if the assets actually exist through vouching he has to go out and inspect them

therefore as other methods of collecting audit evidence the vouching method has its pros and cons.

the auditor must choose the method of collecting the audit evidence depending on the audit assertion he is intending to verify or confirm

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