In auditing, vouching and tracing are two essential procedures used to test financial statement assertions. Both involve audit sampling to verify the accuracy and reliability of transactions, but they test different directions and objectives. Vouching tests for existence and occurrence, moving from accounting records to source documents, while tracing tests for completeness, moving from source documents to the accounting records.

Consider an internal audit of travel expenses. To test existence, the auditor uses vouching by selecting a sample of expense entries from the general ledger and tracing them back to original receipts and travel request forms. This ensures that recorded expenses actually occurred and are supported by documentation.

On the other hand, to test completeness, the auditor uses tracing by selecting a sample of submitted travel requests and verifying whether all were properly recorded in the financial system. This ensures that no legitimate expenses were omitted from the records.

By applying audit sampling in both vouching and tracing, auditors can efficiently verify key assertions without reviewing every transaction. These procedures help ensure the financial records are both accurate and complete, strengthening the reliability of the audit findings.