This document discusses vouching of insurance premiums. It defines vouching as examining documentary evidence to support transactions and identify missing documents. The objectives of vouching are to ensure proper evidence, authority, time period, amount, and that purchases are for business purposes. When vouching insurance premiums, the auditor should check that the policy is related to the client, verify names on the policy, and ensure the policy has not lapsed. The auditor's duty is to periodically review policies for under-insurance, check premium payments match receipts, ensure premiums are not overdue, and entries properly distinguish between insurance types.

2. Vouching
“Examination of all documentary evidence in
support of a transaction and includes
identification of any document that should be
available to the auditor to carry out that
examination”

3. Objectives of Vouching
 Proper evidence
 Proper authority
 Right period
 Correct amount
 Capitals and revenue analysis
 Purchase for business
 Arithmetical accuracy

4. Basic concepts of Vouching
o The date of voucher falls within the account
period.
o The voucher is made out in the client’s name.
o The voucher is duly authorized.
o The voucher comprised all the documents.

5. Insurance Premium
 An insurer, or insurance carrier, is selling
the insurance; the insured, or policyholder, is the
person or entity buying the insurance policy. The
amount of money to be charged for a certain amount
of insurance coverage is called the premium.
 The periodic payment made on an insurance policy.

6. VOUCHING OF INSURANCE PREMIUMS
Auditor should give importance to the following
steps while vouching the insurance premium :
1. Checking Of Policy
2. Related To Client
3. Verify Names
4. Policy Lapsed

7. Documents to be checked…
 Insurance policy
 Insurance premium receipts
 Cover note issued by the Insurance Company
 Correspondence with the Insurance Company
 Other supporting papers and vouchers.

8. Duty of the auditor.
 It should be the duty of an auditor to review the insurance
policy periodically in order to ascertain the under-insurance
in each of the policies under taken.
 The auditor should check the payment of insurance
premium from the receipts obtained from the insurance
companies.
 It should be ensured by the auditor that premiums are not in
arrears and the prepaid insurance has been properly
adjusted against subsequent premium payable.

9.  If the insurance premium paid against risk of fire etc, on
any property, the auditor should confirm that the property
belongs to the concern. However, if the premium is paid
against key-man insurance policy, the auditor should
evaluate the necessity of such insurance coverage.
 Finally, the auditor should check the entries passed for the
premium paid to ensure that proper distinction has been
made between “fire and other natural hazards insurance
with key-man insurance.