Vouching of Wages and Salaries - Vouching, Auditing & Secretarial practice | Auditing and Secretarial Practice - B Com PDF Download

Vouching of wages

The object of vouching wages is to ensure that the payment for wages as recorded in wage sheet and cash book, were actually made properly authorised and were correctly maintained.

Vouching of payment of wages should be done in the following lines.

1. He should enquire into the system of internal check in force in regard to the maintenance of wage records, preparation of wage sheet and payment of wages.
2. If the internal check is effective, the auditor can conduct the vouching of wages on the following lines.

a) He should check a few items of wage sheets here and there to ensure that the calculations are correct.

b) He should check totals of wage sheet with the cash book.

c) He should see that the amount of cheque drawn for wages tallies with the totals of wage sheet.

d) He should see that deduction from wages have properly adjusted and recorded in the books.

e) He should see that wages recorded in the cash book have actually been paid.

f) He should examine the system of employment of casual labour and check the payment made to casual labour.

g) He should see that proper record is maintained for unpaid wages.

h) Wages for the current months should be compared with the wages of the previous month. If there is a material difference, the auditor should enquire into the reason for the difference.

Vouching of salaries

Vouching of payment made for salary should be on the following lines.

1. An auditor should enquire into the system of internal check in operation in the concern in regard to the payment of salaries.
2. If the internal check system in regard to the payment of salaries is sound, an auditor can conduct the vouching of salaries on the following lines.

a) He should see that the salary bill is prepared with the sanction of a responsible officer.

b) He should see that the salary register is duly signed by each employee and counter signed by a responsible official.

c) He should check the salary register with the entries in the cash book.

d) He should see that the deduction for provident fund, life insurance premium, income tax etc have been correctly made and properly recorded in the books.

e) For vouching salaries of the secretary, manager and other important officials, the auditor should examine the board’s minutes book.

f) He should check the attendance register.

g) He should compare the salary bill for the current month with the salary bill of the previous month. If there is any material difference, enquire into the reason for the difference.

h) He should see that the total of the salary book for a particular month agrees with the cheque drawn for salaries.