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Vouching is the process of recognising obligation and authorizing cash disbursements. It deals with the examination of PROFIT AND LOSS items. For example, you see that a company has said to make a payment for that particular object. To ensure this, you need to "find evidence" by vouching it to things like invoice, official receipt, bank statement etc. Normally you vouch to original supporting documents, not photocopies. IT is like tracing it to make sure that the transaction has indeed occured/genuine. This is generally a step in assurance. Or say, the company made a purchase.. these can be traced to purchase order, invoice etc.
As for verification, auditors are normally required to see that the supporting documents are verified whilst auditing.Verification is normally done by a nominated person in the company which involves reviewing, inspecting and checking to ensure that the documents conform to specific requirements. On the other hand, there's another physical verification which is done by the auditors themselves. This is an auditing procedure whereby auditors inspects the actual assets of the company to make sure that they are the same with the written records.It is a substantive audit procedure which deals with examination of BALANCE SHEET transactions/items whether they are assets or liabilities are properly stated. Normally we do this by selecting samples or in some audit firms, setting a scope. For example, we do stocktakes =)
Main difference between the duo: 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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What is the difference between vouching and verification of assets and liabilities?
What_is_the_difference_between_vouching_and_verification_of_assets_and_liabilities
Differentiates between vouching and routine cheking?
The main difference between vouching and routine checking is that vouching requires personal knowledge of a person or thing. When someone is "vouched" for by someone else, the person who is vouching is using their good name as a guarantee.
What is the difference between vouching and routine checking?
Routine checking is where the books and accounts are checked to see that no discrepancies are there. Vouching is a periodic checking of each transaction to make sure it goes through correctly.
What do you mean by vouching?
Vouching has several different meanings depending on how you are using the word. The main definition of vouching is to confirm something is true.
Difference between verification and valuation as per audit basis?
verification is nothing but the existence, ownership & title of assets where as valuation is the correct value of the assets & liabilities at the date of the balance sheet
What is the difference between vouching and verification of assets and liabilities?
What_is_the_difference_between_vouching_and_verification_of_assets_and_liabilities
Differentiates between vouching and routine cheking?
The main difference between vouching and routine checking is that vouching requires personal knowledge of a person or thing. When someone is "vouched" for by someone else, the person who is vouching is using their good name as a guarantee.
What is the difference between vouching and routine checking?
Routine checking is where the books and accounts are checked to see that no discrepancies are there. Vouching is a periodic checking of each transaction to make sure it goes through correctly.
Difference between verification and validation in software testing?
verification: Are we doing the right system? validation : Are we doing the system right?
The difference between investigation and verification?
Investigation is the process of discovering something. Verification is the process of checking to see if something is true.
Types of vouching?
objects and types of vouching
What do you mean by vouching?
Vouching has several different meanings depending on how you are using the word. The main definition of vouching is to confirm something is true.
Importance of vouching?
vouching is the backbone of the audting because with the help of vouching all errors and frauds can be detected so that is very useful in this sense
Difference between verification and valuation as per audit basis?
verification is nothing but the existence, ownership & title of assets where as valuation is the correct value of the assets & liabilities at the date of the balance sheet
What is the difference between defect detection and defect prevention?
The defects detection is the validation process. The defects prevention is a verification process.
What is the difference between SDLC and STLC?
SDLC has both verification and validation activities where as STLC has only validation activity. Simply STLC is a part of SDLC
Vouching in the backbone of audit?
What is meant by Verification of Assets? What are the objectives of verification? Solution: Vouching is concerned with checking entries in the books of accounts with the help of vouchers. The accuracy of books of accounts is maintained through vouching. The entry is recorded and posted on the basis of vouchers only. Comparing of figures in entries and vouchers can help the auditor to locate errors. The location and correction of errors leads to reliable data. The vouching is that the backbone of auditing for discovery of errors. Vouching is an element of auditing. The minor frauds are detected by it. The management can fix the responsibility of fraud. Vouching is a tool in the hands of auditors for ensuring that the books of accounts are accurate. Vouching is essential for checking totals and sub-totals. The total of voucher are tested. The deductions of discount are checked. The addition of taxes or other charges are noted. The net amount is recorded in journals and ledgers. There is a need of correct total for accuracy. Vouching is the essence of auditing. There is a demand for accurate record of audit. When posting is complete in all respect, it means work of vouching is under process. The trial balance is extracted from such record. It will facilities audit work. Verification of Assets The object of verification of assets is the satisfaction by the auditor as to its existence, proper valuation, correct ownership, proper disclosure etc on the balance sheet. Verification of liabilities is also as important as verification of assets. If the liabilities are overstated or understated the balance sheet will not represent a true and fair.Auditor has different responsibilities. If the auditor fails to verify the existence of assets he will be held liable. It is not possible for the auditor to inspect each and every asset e.g. stock. If this duty is imposed on him, it may take weeks, months for him to actually inspect each asset 1. The auditor should verify the records (accounting books) with reference to the documentary evidence. Physical verification of fixed assets is the primarily the responsibility of the the management. 2. The opening balance is to be verified from schedule of fixed assets, ledger or fixed asset register. 3. Assets acquired during the year or improvements done during the year should be verified on the basis of purchase orders, invoices, material receipt notes, and title deeds. 4. Capital assets built inside (self- constructed fixed assets) and capital work-in-progress should be verified by reference to work- order records, contractor bills. 5. For fixed assets fully depreciated during the year of acquisition, the auditor has to examine whether they were recorded in the fixed assets register. 6. In the case fixed assets registered, the auditor should examine (i) the authorisation procedure (ii) sales process (calling for quotations etc.) (iii) adjustments to the account of the asset (iv) accounting for the proceeds of the sale and (v) adjustment for the gain or loss on the sale. 7. Ownership of assets such as land and buildings should be verified by examining the title deeds. In case the title deeds are with other parties such as bankers (mortages or safe custody) and solicitors, confirmation should be obtained directly by the auditor through a request mailed to the concerned persons signed by the client. 8. Physical verification is the responsibility of the management and they need to ensure that it is carried out at appropriate intervals in order to ensure assets are in existence. The auditor has to ensure that physical verification was done. For this purpose, he should observe the verification being conducted. He should examine the instructions given by the management for physical verification and working papers of physical verification. It is to be ascertained that the persons carrying out the physical verification has the necessary competence. Objectives of the asset verification (1) To comprehensively find out the asset status of central enterprises, to faithfully uncover the conflicts and problems existing in enterprises, to truthfully and completely reflect the asset status, financial status and business achievements of enterprises and to enhance the quality of the accounting information of enterprises. (2) To comprehensively check and verify the asset losses of central enterprises and cope with the losses in light of the policies of the state on asset verification, to promote
