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CS Professional · Internal and Forensic Audit · Practices related to Internal Auditing

During an internal audit of a Pune manufacturer's purchase function, the auditor wants to confirm that the invoices booked in the ledger are supported by actual goods received. She traces a sample of ledger entries back to goods received notes and supplier invoices. Which technique is she mainly using?

She is using vouching. Vouching examines recorded ledger entries against supporting documents like invoices and goods received notes to establish that transactions are genuine, authorised and properly recorded. Analytical review, recalculation and physical verification serve different purposes and do not describe this document-tracing procedure.

  1. AVouchingCorrect
  2. BAnalytical review
  3. CRe-performance of calculations
  4. DPhysical verification of inventory

Explanation

Vouching means checking recorded transactions back to supporting documents such as invoices and goods received notes to confirm they are genuine and authorised. Analytical review compares trends and ratios, re-performance recomputes figures, and physical verification inspects assets. None of these describes tracing ledger entries to documents.

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