arushi_13 wrote: Tracing means you trace forwards from supporting docs to journals and then to ledgers and finally to Financial statements. U r basically looking that all items in the source docs are RECORDED in the FSs.It supports management's assertion for COMPLETENESS. Vouching on the other hands means u are looking that items that were recorded in the FSs there is support for them. So the direction is reversed. U trace back from FSs to ledgers and then to journal and then to source docs. U are basically looking for whether all items recorded in FSs are VALID.It supports management's assertion for EXISTENCE. Once u know the transaction cycles it becomes very easy for you to decide whether it is Vouching or Tracing. If you have any specific Qs I would be happy to help.

Excellent explanation.

arushi_13 wrote: Tracing means you trace forwards from supporting docs to journals and then to ledgers and finally to Financial statements. U r basically looking that all items in the source docs are RECORDED in the FSs.It supports management's assertion for COMPLETENESS. Vouching on the other hands means u are looking that items that were recorded in the FSs there is support for them. So the direction is reversed. U trace back from FSs to ledgers and then to journal and then to source docs. U are basically looking for whether all items recorded in FSs are VALID.It supports management's assertion for EXISTENCE. Once u know the transaction cycles it becomes very easy for you to decide whether it is Vouching or Tracing. If you have any specific Qs I would be happy to help.

THANKS!!  I watched the next lecture after I posted that question and it was explained in greater detail, but your answer sums it up.  I'm making a note card with your explaination right now!  :-)