Vouching is a technical term which refers to the inspection by the auditor of documentary evidence supporting and substantiating a transaction. It is the act of reviewing documentary evidence to see if it properly supports entries made in the accounting records. When an accounting transaction is vouched, it is tested and verified by presenting relevant documentary evidence.
Simply stated, vouching for means a careful examination of all original evidence. When vouching uncovers an error, the auditor may need to increase the sample size being audited in order to gain assurance that a system operates properly. An alternative is to engage in different auditing procedures. The act of examining documentary evidence in order to ascertain the accuracy of the entries in the account books is called vouching.
It is the practice followed in an audit, with the objective of establishing the authenticity of the transactions recorded in the primary books of account. When engaged in vouching, an auditor is looking for any errors in the amount recorded in the accounting records, as well as ensuring that the transactions are recorded in the correct accounts. It essentially consists of verifying a transaction recorded in the books of account 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.