Difference Between Vouching And Verification In Audits

Whether you are an internal or external auditor, vouching and verification is must for substantive audit procedures. By performing vouching and verification, the auditor is able to ensure the adequacy of the internal controls and accounting systems and finally accuracy, existence, completeness,etc of the end balances in the financial statments hence able to form an opinion whether the financial statement reflects a true and fair figure.

Let’s understand the basics of Vouching and Verification:


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

  • 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

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