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Meaning and importance of Vouching Vouching, widely recognized as “the backbone of auditing,” is a component of an audit seeking to authenticate the transactions recorded in a firm’s book of accounts. When an accounting transaction is vouched, it is tested and verified by presenting relevant documentary evidence. 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. 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. Vouching does not include valuation. Importance Of Vouching Vouching is the act of checking evidential documents to find

Meaning and objectives of Vouching Vouching, widely recognized as “the backbone of auditing,” is a component of an audit seeking to authenticate the transactions recorded in a firm’s book of accounts. When an accounting transaction is vouched, it is tested and verified by presenting relevant documentary evidence. 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. 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. Vouching does not include valuation. Objectives: Main objective of vouching is to find out the regularity or irregularity of

Types of Assessment under Income Tax Act 1961 Every taxpayer has to furnish the details of his income to the  Income-tax Department. These details are to be furnished by filing up his return of income. Once the return of income is filed up by the taxpayer, the next step is the processing of the return of income by the Income Tax Department. The Income Tax Department examines the return of income for its correctness. The process of examining the return of income by the Income-Tax department is called as “Assessment”. Assessment also includes re-assessment and best judgment assessment under section 144. Under Income Tax Act, 1961, there are four types of assessment as mentioned below: Assessment under section 143(1) This is a preliminary assessment and is referred to as summary assessment without calling the assessee (i.e., taxpayer). Scope of assessment under section 143(1) Assessment under section 143(1) is like preliminary checking of the return of income. At this stage no

Remuneration of Auditor If the auditor has been appointed by the Board of Directors, is is the Board which fixes his remuneration. If the auditor has been appointed by the central government then the central government fixes his remuneration. If the auditor has been appointed by the shareholders at the general meeting, it is the company which determines his remuneration unless the company in general meeting may delegate the power of fixing his remuneration to someone else. It is not necessary that the remuneration be fixed at the same meeting at which his appointment has been made. The retiring auditor who is automatically reappointed at the general meeting, unless a resolution is passed re-fixing his remuneration, is entitled to get the same remuneration as he was getting earlier. If an auditor is asked to do any other work over and above his normal work of audit, he is entitled to get extra remuneration. Any sum paid by the company in respect of the auditors expenses sha

Removal Of Auditor No new auditor can be appointed in place of an existing auditor unless the latter has been given a due notice according to the companies Act. The companies Act does not lay down anything as to what will be the consequences if a due notice is not given to the retiring auditor or the members. However, according to law if a due notice has not been given the resolution regarding the removal of the auditor cannot be put before the general meeting. If still the auditor has to be removed, again a general meeting must be held to remove the auditor. An auditor can be removed only by the general meeting, with the approval of the central government but the first auditor van be removed by the general meeting. The first auditor who is appointed by the directors to hold the office till the conclusion of the first annual general meeting may be removed before the expiry of  his term by the general meeting even without the approval of the central government, provided at-l