Vouching audit is an audit procedure to verify the authenticity of statements contained in the general ledger, trial balance, and so forth. This procedure is significant in the examination of the company's financial statements, because the slightest fraud has the potential to harm the company.
In this context, not only the company's finances are at stake. But also the integrity of the company in the eyes of policy makers and external parties involved. Therefore, companies should be wary of irregularities related to finances.
What Is Vouching Audit?
Vouching audit is the review of accounting records to ensure the validity of transactions through supporting documents.
Vouching can also be interpreted as an audit technique to test the presence, ownership, valuation and presentation of transactions and balances in the company's financial statements.
This process aims to ensure that the transactions recorded in the accounting records are appropriate and relate to the corporate entity. In addition, supporting documents can be verified as valid evidence.
Vouching function on Audit
1. Ensure The Accuracy Of Financial Statements
Vouching audits are performed to ensure that each transaction is recorded with the right numbers. Each transaction is supported by quality and reliable proof of transaction. For example, invoices, receipts, bank records, employment contracts, and so on.
2. Detect Cheating
In addition, vouching audit is also able to help companies detect fraud in transaction records. Like a fictitious transaction, mark-up transaction value, false supporting documents, double recording, until the manipulation of the transaction date.
By knowing fraud that occurs and potentially in the future, auditor. can suggest improvements to the internal control system so that it does not cause fatalities.
3. Ensure compliance with policies and regulations
Auditors not only match transaction records with supporting documents, but also compliance with policies and regulations that have been established since the beginning. By ensuring this compliance, the auditor can assess that all transaction activities are authorized by authorized parties.
4. Achieving transparency and accountability
In a company that has a high transaction volume, it is important to conduct transparency and accountability in every transaction record. This is a function of vouching audits conducted by auditors.
By ensuring that all transactions are correct and accountable, the company's reputation can be improved in the eyes of stakeholders and external parties.
Types and objects of Vouching in audits
There are several types of vouching that auditors can use when conducting an examination. Its use can be tailored to the purpose of the company's desired vouching.
- Transaction Receipt - vouching to ensure the company does not record fictitious income. Auditors examine supporting evidence related to acceptance transactions, such as sales invoices, travel letters or proof of delivery, and proof of payment or receivables.
- Expenditure transactions - vouching to ensure no fraudulent payments or fees. Auditors examine supporting evidence related to expense transactions, such as vendor invoices, proof of payment, contracts, and internal authorizations.
- Asset transactions - vouching to ensure the existence and ownership of the company's assets. The Auditor examines supporting evidence related to the company's assets, such as asset purchase invoices, handover minutes, ownership documents, to depreciation records.
- Adjustment Journal - vouching to ensure the recording of transactions is carried out in a reasonable, reasonable, and in accordance with accounting standards. The Auditor checks the calculation base, supporting documents, authorization, reasonableness of values, and compliance with accounting standards.
Every vouching technique performed by auditors involves several supporting documents that are important to check as proof of transaction records. Here are some of the objects that can be involved during the audit.
- Cash and bank - such as proof of cash out, cash in, checking account, bank statement, and proof of transfer.
- Sales and receivables - such as sales invoices, road letters, sales contracts, and proof of cash receipts.
- Purchases and debts - like Purchase Order (PO), purchase invoices, roads, minutes of receipt of goods, and purchase contracts.
- Operating expenses - such as receipts, official travel documents, and proof of overtime.
- Preparation - such as inventory cards, Stock reports, overnight stock results, and purchase invoices.
- Fixed assets - such as asset purchase invoices, contracts, ownership documents, and depreciation calculations
How To Create A Vouching Audit
In general, the application of audit vouching to accounting records goes through four stages as follows.
1. Selecting transaction samples from accounting records
In conducting a vouching audit, the auditor may initiate a review of the company's accounting records. Such as ledgers, financial statements, bank statements, payroll, and so forth.
2. Collecting and reviewing transaction supporting documents
After that, the auditor collects supporting evidence of transactions that are relevant to the type of vouching done. Supporting evidence can be in the form of invoices, contracts, PO, to proof of payment. The supporting evidence is reviewed for authenticity and validity to avoid false evidence.
3. Verifying the match of accounting records and supporting documents
The Auditor performs the matching of supporting evidence with the accounting records examined. Starting from the value of the transaction, the date, the parties involved, the type of goods or services listed, and their authorization. This verification is done to ensure the accuracy and fairness of the transaction.
4. Ensure transaction compliance with standards and policies
The last stage is to ensure compliance of the company's transactions with the agreed standards and policies from the very beginning. Good compliance with internal sops, accounting standards, procurement provisions, to applicable regulations.
Example Of Vouching Audit
To get a deeper understanding, see an example of its application in the following acceptance vouching example.
For example, PT FGH recorded revenue of Rp1, 200, 000, 000 in January 2025. To ensure that the figures recorded in the accounting records are accurate, the company appointed an auditor to conduct a vouching audit in January 2025 at PT FGH.
This vouching Audit is also carried out to avoid fictitious income and ensure that the recording of the period in the transaction record is appropriate.
Next, the auditor traces the acceptance figures in the ledger and matches with a number of supporting evidence. Such as sales invoices, work contracts with clients, proof of delivery of services, and proof of receipt of payment or receivable.
The result of the examination states that the income is true, reasonable, and reliable. Supporting documents have been included in full and can be accounted for.
Closing
Vouching audit can be a way for companies to ensure proper transaction recording, detect fraud, and ensure compliance with regulations and policies.
In practice, this method can be combined with other methods such as tracing audit to produce a comprehensive audit and an objective opinion on the company's financial statements.
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