Tracing vs Vouching on AUD: How Do You Stop Mixing Them Up?

Start with the accounting records

Imagine the accounting records are in the middle. The auditor can move in two directions. Start with something already recorded and find evidence supporting it, and you are generally vouching. Start with source evidence and check whether it reached the accounting records, and you are generally tracing.

Records back to evidence

Vouching often starts with a recorded item and moves back to source support. The concern is whether the recorded transaction actually happened, which commonly relates to existence or occurrence.

Evidence forward into the records

Tracing often starts with evidence that a transaction happened and moves forward into the accounting records. The concern is whether a real transaction was left out, which commonly relates to completeness.

Revenue example

The sales journal shows a $25,000 sale. You select that recorded sale and inspect shipping documentation. You moved from records to source support, so you are vouching and testing whether the recorded sale actually occurred.

Liability example

You find a receiving report showing goods arrived before year-end, then check whether the payable was recorded. You moved from source evidence into the accounting records, so you are tracing for completeness.

Use the starting-point rule

Questions do not always use the words trace or vouch. Ask where the auditor began. A recorded accounting population usually suggests existence or occurrence testing. Source documents or real-world events usually suggest completeness testing.

The takeaway

Vouching asks whether something recorded is real. Tracing asks whether something real was recorded.

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