Vouching

Explanation :

Seeking to establish the accuracy of recorded transactions, vouching ensures that all the entries in the books of accounts come with the relevant evidence, including invoices, receipts, and others. Vouching does not take into account the non-business transactions, thus helping auditors to ensure that all transactions in a firm’s book of accounts are business-related. Auditors confirm that the amounts mentioned in each transaction are truthful, disclosing the nature of a transaction, and its authorization.

In a nutshell :

• Vouching is a technical term that refers to the inspection of documentary evidence supporting and substantiating a financial transaction, by an auditor. It is the essence of auditing
• Vouching is the practice followed in an audit, with the objective of establishing the authenticity of the transactions recorded in the primary books of account. 
• It essentially consists of verifying a transaction recorded in the books of accounts  with the relevant documentary evidence and the authority on the basis of which the entry has been made.
• Also confirming that the amount mentioned in the voucher  has been posted to an appropriate account which would disclose the nature of the transaction on its inclusion in the final statements of account. Vouching does not include valuation