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Chapter: 11th Auditing : Chapter 6 and 7 : Vouching of Cash Transactions

Cash Paid To Creditors

While vouching cash payment to creditors, the auditor should examine the system of Internal control in existence.

Cash Paid To Creditors

 

While vouching cash payment to creditors, the auditor should examine the system of Internal control in existence. He should check the entries in the cash book with the receipts issued by creditors or counterfoils of cheque book and bank statement. He should compare the ledger balances of creditors with statement of accounts sent by them. Further, the auditor should ensure that all payments made to creditors are properly authorized by a responsible official. When payment was made as full and final settlement, auditor should verify whether the company has been availed any discount and is accounted as discount received.

 

Documents to be Vouched: Receipts issued by creditors, Invoices, Statement of accounts of creditors, Bank statement.

 

Example

On 12.3.17, Paid cash to Rakesh Rs.22,000 being supplier of goods.

 

Vouching of Cash paid to Creditors.

Auditor should vouch the transaction in the following manner:

1. Verify entry in Cash Book with respect to date, name of creditor or supplier and amount paid.

2. Verify entry in Creditor or Supplier Account with reference to date and amount.



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