Definition
In vouching the auditor starts with an entry in the ledger or a schedule and works backward to the source: the invoice, receiving report, contract, check or approval. The direction matters. Because the starting point is an item that is already recorded, vouching tests whether recorded items are real and properly supported, not whether anything was left out.
Why it matters in an audit or review
It addresses occurrence and existence, and is the standard response to the risk that assets, revenue or expenses are overstated. Vouching is a type of inspection under AU-C 500, and the quality of the evidence depends on the document: an external, original document is stronger than an internally generated copy.
Example
The auditor selects 30 additions from a $900,000 fixed asset additions schedule (illustrative) and vouches each to the vendor invoice, the proof of payment and the approval. One item is a repair of $6,400 that should have been expensed. The error is carried to the misstatement summary.
Common mistakes
- Using vouching to support completeness. For completeness, trace forward from source documents instead.
- Checking that a document exists without checking date, amount, payee and period.
- Accepting a photocopy or a client-printed statement when an original is available.
FAQ
What is the difference between vouching and tracing?
Vouching goes from the records to the documents. Tracing goes from the documents to the records.
Sources
- AICPA, AU-C Section 500, Audit Evidence (inspection; reliability of evidence)
Definitions paraphrase AICPA and FASB guidance; read the standard itself before relying on a requirement. Example figures are illustrative. This page is guidance, not professional advice. Report an error