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.
More from this Section
- Straight-line method of amortization
Straight-line method of amortization is a method of amortizing bond discount or bond premium that results in allocating the same amount to interest expense in each interest period.
- Term and serial bonds
Bonds that mature-are due for payment-at a single specified future date are term bonds. In contrast, bonds that mature in installments are serial bonds.
- Unlimited liability
Each partner is personally and individually liable for all partnership liabilities. Creditor’s claims attach first to partnership assets. If these are insufficient...
- Specific identification method
Specific identification method refers to an actual physical flow costing method in which items still in inventory are specifically coasted to arrive at the total cost of the ending inventory.
- Average-cost method
Average-cost method is an inventory costing method that uses the weighted average unit cost to allocate to ending inventory and cost of goods sold the cost of goods available for sale.
- Technique of auditing
The technique of auditing we mean to say the methods of procedure adopted by an auditor in checking the accounts. This technique of
- Promissory note
A promissory note is a written promise to pay a specified amount of money on demand or at a definite time. Notes receivable give the payee a stronger legal claim...