What Does The Asset Verification Mean For An Auditor?

What Does The Asset Verification Mean For An Auditor?

The process of verification is one of the essential means by which an auditor chooses to satisfy himself about the records of the assets and other liabilities that are listed down in the balance sheet after collecting the necessary documentary evidence. Further, Crypto Code verification can be simply related to an inquiry conducted to know more the price, possession and title, the existence of any taxes or other charge forms on the assets.

However, it is difficult for the auditor to verify with each and every asset available with the business company. For achieving this task of knowing more about the different stock in detail, he relies on the internal auditors arranged by the company itself. In fact, it is the duty of the auditor to physically examine at least some of the assets. The main requirement of this strategy is to present the report based on the truth and fairness of the balance sheet and thus, the state of affairs of the organization. If in case, he fails to do so, then he is held liable for not doing his duty in the proper manner.

According to the ICAI system, the auditing practices followed by the auditor in regard to assets should feature

  • The asset existence. It is the duty of the auditor to make sure if all the asset is physically existing as per the date indicated on the balance sheet.
  • Possession of title. This also needs to be taken note of that if the stocks are in the possession of the organization on the date of balance sheet.
  • Their ownership tag belongs to the client or says the company. The auditor has to ensure if all the assets are legally owned by the company.
  • The client can be himself or any person authorized by him to own the asset
  • These assets are not liable for any undisclosed charge or lien. The auditor has to verify it.
  • The detailed record should be existing. All the assets and other liabilities must be listed in the books of account and there should be no omission of any item. Further, they should be clearly stated in the balance sheet along with their true value with proper accounting principles.
  • Preparing the Audit report. The auditor has to write down the summary of the physical verification conducted on the fixed assets and also, has to note down the difference if any between the physical stocks and that numbered or detailed on the record book.