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In: Accounting

This is a question for someone with Auditing experience: Ch3 Q 4 What is meant by...

This is a question for someone with Auditing experience:

Ch3 Q 4

What is meant by (a) vouching, (b) tracing, and (c) scanning? What is the difference between vouching and tracing?

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A.Vouching-

financial item followed back to origin (source doc). Provides evidence for existence and occurrence, NOT for completeness, sometimes helps with valuation and allocation
B.Tracing-

financial item followed forward from source doc to journal/ledger entry. Provides evidence for completeness, sometimes for valuation and allocation
C.Scanning-

"eyes-open" approach of looking for anything unusual

The difference between vouching and tracing:

Tracing

Tracing refers to first selecting an accounting transaction (a source document) and then following it into the journal or ledger. The direction of testing in this case is from the source documents to the journals or ledgers and tests whether transactions that occurred are recorded (completeness) in the accounting records.

Tracing bermaksud menjejaki ke depan dari dokumen sokongan hingga ke jurnal, lejer dan akhirnya Penyata Kewangan. Pada asasnya anda perlu meneliti semua item dalam dokumen sokongan telah direkod dalam Penyata Kewangan. Ianya dalah penting untuk menyokong penegasan/perakuan (assertion) pengurusan bagi KESEMPURNAAN (COMPLETENESS).

Vouching
Vouching refers to first selecting an item for testing from the accounting journals or ledgers and then examining the underlying source document. Thus, the direction of testing is from the journals or ledgers back to the source documents. Vouching provides evidence that items included in the accounting journals or ledgers have occurred (are valid).


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