• Is a substantive audit procedure which deals with examination of profit and loss transactions/items

• Normally, extensive vouching exercise is done during the depth test/cradle-to grave test

• Vouching enable the auditor to know whether the transactions are genuine and valid to enable the auditor to report on the financial statements

Salient point:

When vouching/examining a transaction, the essential points need to be ensured:

• The date of the voucher falls within the accounting period;
• Voucher/transactions therein are duly and properly authorized by the relevant signatory;
• The transactions being examined belongs to the entity and took place during the relevant period;
• The transaction is recorded in the proper account and revenue or expenses is properly allocated to the accounting period;
• All transaction which have actually occurred have been recorded
• The posting from the voucher of the amount needs to be correctly taken in the final accounts, disclosed in accordance with recognized accounting policies and procedures.
• The voucher that is being examined need to be properly supported with all and relevant documents

• Is a substantive audit procedure which deals with examination of balance sheet transactions/items whether they are assets or liabilities are properly stated in the balance sheet

• Also applies to profit and loss item to check the account balances and their presentation

• Verification process encompasses the inquiry into the ownership/ title, existence, valuation, completeness and presentation of assets and liabilities in the balance sheet.

Vouching is the substantive testing/examination of transaction at their POINT OF ORIGIN

whereas Verification usually deals with the FINAL BALANCE in the Final Accounts viz the balance sheet and profit and loss