CA.

Nitin Gupta Rathore Institute

RATHORE INSTITUTE
Auditing & Assurance
BY CA. Nitin Gupta

How to prepare the chapter Vouching

Basic points covered in vouching of all transactions:
1) Examine voucher of the transaction, it should be properly dated, serially numbered and
duly authorized.
2) Examine the calculation of voucher.
3) Examine proper recording of transaction. Related accounts are properly debited &
credited.
4) Examine posting in relevant ledgers.
5) Examine cash book. (Receipt/ Payment)
6) Examine acknowledgement received (in case of payment)/ provided (in case of receipt)

Summary of Vouching
Items Procedures for vouching Relevant documentary evidence
Credit Sales Examine sales book Sales Book
Examine sales invoice Sales invoices
Examine numerical sequence of Goods outward notes
source documents generated
within the entity
Examine treatment of additional
charges and trade discount
Routine checking
Examine cutoff procedures Sales vouchers at the beginning and
end of current period

Goods on sale Examine memorandum book Memorandum Book

or return basis
CA. Nitin Gupta Rathore Institute

Examine inclusion of goods on Sales Book & Debtor ledger (If sale is
sale or return basis in inventory approved)
(If sales were not approved)
Statement of customers giving
details of inventory.
Examine the case where sales Sales book
were approved. (It will be
considered as sale)

Goods on Examine consignment sales book Consignment sales book, Copy of

consignment Performa invoices
Examine account sale (Periodical Account sales
statement received from
consignee)
Ensure posting into relevant Ledger of consignment account,
ledger accounts nominee account and relevant
nominal accounts
Examine valuation of closing
stock. (Loading should not be
included in it)
Examine commission paid to Agreement with consignee.
consignee

Sales Return Examine sales return book, Store
ledger.
Examine credit notes (issued by
entity to debtor who has returned
the goods)
Examine cutoff procedures
Sales return book, Store ledger.
Credit notes. These should be
serially numbered.
Sales return vouchers at the
beginning and end of current period

Credit Examine purchase book Purchase book

Purchase
Examine purchase invoice Purchase invoice
Examine numerical sequence of Purchase requisition , Purchase
source documents generated order, Goods received notes
within the entity
Examine cutoff procedures Purchase vouchers at the beginning
and end of current period
Goods purchased must not be for
personal use of director’s &
officers

Purchase Examine purchase return book Purchase return book

CA. Nitin Gupta Rathore Institute

return
Examine debit notes (issued by Debit notes. These should be serially
entity to creditor to whom goods numbered.
are returned)
Examine cutoff procedures Purchase return vouchers at the
beginning and end of current period

Cash sales Examine cash book Cash book

Examine cash memos Daily cash summary, Cash memos
Routine checking Salesmen’s summary, Goods
delivered summary

Rent received Examine cash book Cash book

Examine rent receipts Rent receipts
Special attention towards rent Lease deeds/Agreement
outstanding.
Routine checking List of property provided on rent,
Recording, posting in relevant
ledgers.

Dividend & Examine cash book Cash book

interest
received
Examine type of investments Schedule of investment
Examine dividend warrants Dividend warrants
Special attention towards interest Schedule of investment, loans and
outstanding deposit
Examine recording of dividend Investment certificates
and interest at correct amounts
Examine compliance with AS-9

Commission Examine cash book Cash book

received
Examine calculation of Commission agreement
commission
Examine commission outstanding
Examine compliance with AS-9

Bad debt Examine cash book Cash book

recovered
Verify bad debt dividend Dividend warrant of official
receiver, correspondence with
official receiver.
CA. Nitin Gupta Rathore Institute

Ensure proper treatment in

statement of P/L

Sale of scrap Examine cash book Cash book

Examine sales invoice Sales invoice
Review cost records and financial Cost records, financial records
records
Analytical review procedures Past records
Examine management procedure
to identify scrap

Insurance Examine cash book Cash book

claim
Examine copy of claim lodged Claim copy
with GIC
Valuation of loss Report of surveyor
Examine correspondence with Copy of correspondence
GIC and agent

Receipts of Examine cash book Cash book

capital
subsidy
Examine the correspondence with Correspondence with Government
the Government and the copy of
application
Note the conditions attached with Copy of application, Documents
grant related to grant of subsidy
Ensure compliance with AS-12

Sale of Examine cash book Cash book

Investment
Examine Broker’s Note Broker’s Note
Authorization of sales AoA
Compliance with AS-13

Wages & Examine cash book Cash book

Salaries
Examine the pay-roll summary Pay-roll summary, Job card,
Relevant ledgers
Examine employee data Employee register.
(employee name, wage rate,
attendance summary)
Examine unclaimed wages Schedule of unclaimed wages
CA. Nitin Gupta Rathore Institute

Travelling Exp Examine cash book Cash book

Examine standard form for Standard form for claiming
claiming reimbursement reimbursement
Examine Director’s travel rule AoA
Examine relevant documents Ticket of mode of transport used,
Hotel bill.

Custom Examine cash book Cash book

Duties
Examine Bill of Entry Bill of Entry
Commission paid to clearing and Agreement with agent
forwarding agent.
Examine rate of duty Custom act and Custom tariff act
Examine duty paid Acknowledgement from Custom
department
Examine provisional assessment Provisional assessment order
(In case of any dispute)
Verify the claim of duty draw
back

Excise Duties Examine rate of duties Central excise tariff act.

Examine payment of duty Challan, Personal ledger account
(PLA)
Examine cash book Cash book
Ensure proper provisioning of Profit & Loss account
goods not released
Ensure CENVAT credit has been
adjusted while claiming
depreciation on fixed assets.

Remuneration Examine the entitlement AoA

paid to
Directors
Examine legal provision 309(3) (4), 309(2), 198, 310
Examine relevant documents Agreement, Attendance record,
Bank Statement

Advertisement Obtain advertisement Schedule / Register

expenses schedule/register
Examine advertisement contract Advertisement contract
Examine statement of accounts Statement received from agency
Vouch the payment Bank Statement
CA. Nitin Gupta Rathore Institute

Examine proof of advertisement Copy /Video clip/Audio clip of

advertisement.
It should be as per the object of
the entity

Payment of Examine Cash book Cash book

Income Tax
Examine receipt of challan Challan
Examine documents Assessment order, Demand order,
Ledger

Retirement Ascertain the requirement to pay Legal provision of gratuity, Contract

gratuity /Agreement with employee
Examine service contract
Examine the validity of the basis
on which gratuity is payable to
the employee
Recomputation
Ensure compliance with AS-15

Preliminary Examine nature of preliminary

expenses expenses. (Registration fee, Cost
of printing of documents, Stamp
Duty). Ensure that other expenses
are not included in it, like
Underwriting Commission,
Brokerage.
Disclosure of preliminary exp in Prospectus
prospectus
Examine Board Resolution Minutes of BM

Research & Examine R & D activity relates to MoA, AoA, BoD resolution
development business of the entity
expenses
Examine Cash Book Cash Book
Examine compliance with AS-26
Ascertain nature of R & D work, it Examine MoA (Object clause)
should be relevant to entity’s
object.
Examine Board Resolution Minutes of BM
authorizing R &D.
Examine these are considered Computation of Taxable income as
while provisioning of Income Tax. deduction is available for R & D exp.
CA. Nitin Gupta Rathore Institute

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