Final answer:
Question Tracing and Vouching are audit procedures used to ensure the accuracy and validity of the transactions recorded in accounting records. Question Tracing tracks transactions from source documents to financial statements, while Vouching verifies these records against supporting documents.
Step-by-step explanation:
In the context of accounting, Question Tracing and Vouching are both important audit procedures used to verify the accuracy and completeness of accounting records. Question Tracing involves tracking transactions from their inception in the original documents (like invoices or receipts) to their final entry in the financial statements. It ensures that transactions are recorded completely and properly in the books. Vouching, on the other hand, is the process of checking the validity of the transactions recorded in the books of accounts by verifying them against supporting documents. It focuses on the verification of transactions to ensure that they are genuine, properly authorized, and correctly recorded.
Question Tracing is generally forward-looking, meaning it starts with source documents and follows the transaction through to the ledger and the financial statements. By contrast, Vouching is backward-looking, starting from the ledger or financial statements and tracing back to the original supporting documents.
Both procedures are crucial for detecting errors, ensuring compliance with relevant accounting standards, and maintaining the credibility of the financial statements. While Question Tracing emphasizes completeness and accuracy through forward analysis, Vouching puts an emphasis on validity and authorization through backward analysis. They are complementary procedures that together bolster an auditor's confidence in the financial records of an entity.