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A book entry can be wrong, unapproved or fictitious, and the trial balance alone cannot show it.
Pick an entry, find the documents that support it, and check that the transaction is real, approved, correctly valued, in the right period and recorded in the right account.
A sample of entries chosen by value and risk, the supporting invoices, receipts, approvals and bank statements, and a working paper to record what was seen.
A tested sample with each entry marked as supported or queried, and a list of exceptions for the client to explain.
Vouching is checking an entry in the books against the document that supports it, such as an invoice, a receipt or a bank advice. The aim is to confirm that the transaction is real, was approved, and was recorded for the right amount, in the right account and in the right period.
It is the first audit skill most CA articleship students learn, because nearly every other test leans on it.
What documents does an auditor vouch?
| Transaction | Supporting document | What is checked | Common red flag |
|---|---|---|---|
| Vendor payment | Invoice, goods receipt note, approval, bank debit | Payee, amount, TDS, date | Payee on bank debit differs from vendor |
| Cash payment | Bill, cash voucher signed by the payee | Amount, purpose, cash limit | Cash payment above ₹10,000 to one person in a day (Section 40A(3) of the 1961 Act) |
| Purchase | Purchase order, invoice, GRN | Quantity, rate, GST charged | Invoice dated after the year-end but booked before it |
| Sale | Sales invoice, delivery challan, e-way bill | Customer, rate, dispatch date | Dispatch in April for a sale booked in March |
| Receipt from customer | Bank credit, remittance advice | Customer name, invoice cleared | Receipt credited to the wrong customer |
| Salary | Attendance, salary sheet, bank transfer list | Headcount, deductions | An employee who has left still on the list |
How is vouching different from tracing and from verification?
- Vouching starts in the books and goes back to the document. It tests whether recorded entries are real.
- Tracing starts at the document and goes forward to the books. It tests whether every real transaction was recorded. A sales invoice traced to the sales register checks completeness.
- Verification looks at balances at the year-end: counting stock, inspecting a fixed asset, or getting a bank confirmation.
Vouching proves occurrence. Tracing proves completeness. Verification proves existence and value at a date. Under SA 500, all three are ways of collecting audit evidence.
How do you vouch a payment, step by step?
- Pick the entry from the cash book or bank book.
- Find the vendor invoice and check name, GSTIN, date and amount.
- Check the goods receipt note or proof of service.
- Check the approval signature or the approval in the system.
- Check that TDS was deducted at the right rate, where it applies.
- Match the bank debit on the statement, including the UTR number.
- Record what you saw and any query in your working paper.
Worked example: a ₹48,500 vendor payment
The cash book shows a payment to Shree Packaging Pvt Ltd on 12 July 2025 against invoice SP/0912 for packing work.
| Check | Document seen | Result |
|---|---|---|
| Invoice | SP/0912 for ₹48,500, dated 2 July 2025 | Agrees |
| Proof of work | Job completion note signed by stores | Agrees |
| Approval | Purchase head’s approval on the invoice | Agrees |
| TDS | 2 percent under Section 194C for a company contractor: ₹970 | Deducted |
| Net payment | ₹48,500 minus ₹970 = ₹47,530 | Agrees with books |
| Bank debit | HDFC Bank statement, 12 July, NEFT ₹47,530, UTR noted | Agrees |
Every line ties, so the entry is supported. If the bank had shown ₹48,500, the student would raise a query: either TDS was missed, or ₹970 sits in the books as deducted but was never actually withheld.
Section 194C is the 1961 Act number. For payments from 1 April 2026 the same duty sits in the Income-tax Act 2025 under a new section, so check which law applies to the year being audited.
Why does vouching a bank payment end at the bank statement?
The last step of every payment test is the bank debit. That is why auditors rely so heavily on the bank reconciliation and on bank confirmations: if the books and the bank statement do not tie, vouching cannot finish. A clean monthly reconciliation means the student finds each debit in seconds rather than hunting through twelve months of statements.
What to read next
- What are audit working papers? Meaning, contents and examples
- Statutory audit execution for CA firms
- Internal audit and reconciliation
- Related: reconciliation software India
Content authored by practitioners with experience at Amazon India, Intuit QuickBooks, and the Tata Group. Meet the team →