Examples Of How Business Asset Verification Is Performed By An Auditor

Examples Of How Business Asset Verification Is Performed By An Auditor

The real meaning of verification lies in the ownership, existence, and procurement of various assets and is therefore different from the valuation method which rather certifies the value truth of assets and other liabilities. Apart from this, there exist other differences like in the case of

  • The verification process is usually performed towards the end of the year whereas the valuation segment is done throughout the year during the function course of the business company.
  • The responsible personnel. While the verification scheme is properly done by the auditor, the valuation strategy is executed by the proprietor himself.
  • Presentation of Evidence. Verification includes the detailed checking of various title deeds, the receipts of business transactions and payments. Alternatively, the certificate offered by the company proprietor forms the main and only documentary evidence for conducting valuation.

How to verify the cash maintained in a business organization?

  • Is it safe enough to practice money checking only on the last day of the year?

A Case like this is to be handled with care mainly because there is no guarantee that the cash produced for checking was in fact held by the custodian. So, it is wise enough to give a visit towards the mid of year without prior notice to any of the company officials for checking.

  • If more than the expected figure is found with the business cash balance, then all the cashiers connected with the various departments like the petty cashier or branch cashier or any balance account of the employees has to evaluated simultaneously, so that any chance of money shortage in one account is not made appropriate by transferring the amount from another.
  • It is also an advisable option to ask the cashier to be present while the balance is being counted upon. Further, he must be made to sign the balance statement prepared by the auditor which enlists the details of cash balance which is accounted for. Otherwise, there can be chances that the cashier can easily refute the money with him which can put the auditor in an embarrassing stage.
  • If in case, the auditor himself is not able to conduct the verification as per the date is written on the balance sheet, he can ask the client to deposit all the business money with the bank which should be done till the following morning.
  • The auditor should check with all the receipts, payments, cheques, cash book or other payment entries up to the date he counts the cash.

    Vanessa Chambers