Meaning of verification is ‘proving the truth’, or ‘confirmation’. An auditor has not6 only to see the arithmetical accuracy and bona fides of the auditor has not only to see the arithmetical accuracy and bona fides of the transactions in the books of account by vouching only, but has also to see that the assets as recorded in the balance-sheet actually exist. The fact that there is an entry regarding the purchase of an asset and which entry has been found to be correctly recorded, is not a proof that the asset is in the possession of the concern at the date of the balance-sheet. It is possible that after the asset had been acquired and the necessary and no entry had been made regarding these facts in the books of account before the closing of the financial year. He has also to see whether a particular asset as recorded in the balance-sheet on the day of the closing of the books of account exists or not.
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A business organized as a separate legal entity under state corporation law and having ownership divided into transferable shares of stock is a corporation.