John is auditing MegaCorp.He finds an accounts payable for 10,000 cases of ball bearings.He checks to make sure the paper actually arrived and that the receiving department signed and dated the invoice.He also checks the original purchase order to make sure the purchase was properly authorized.This illustrates
A)tracing.
B)vouching.
C)following.
D)monitoring.

Question

Quizplus · Accepted Answer

Vouching involves verifying the authenticity of transactions recorded in the books of accounts by examining the documentary evidence and authority. In this scenario, John is verifying the transaction (purchase of ball bearings) by checking the delivery receipt and the authorization through the purchase order, which is a process of vouching.

John Is Auditing MegaCorp