The correct answer is: C. Verification has nothing to do with valuation.
Valuation is the process of estimating the worth of an asset or liability. Verification is the process of ensuring that the information presented in financial statements is accurate and complete. These are two separate processes that serve different purposes.
Valuation is important because it helps to determine the fair value of an asset or liability. This information can be used for a variety of purposes, such as making investment decisions, setting prices, and determining taxes.
Verification is important because it helps to ensure that financial statements are accurate and complete. This information is used by investors, creditors, and other users to make decisions about the company.
Auditors are not valuers. They are responsible for verifying the information presented in financial statements, not for estimating the worth of assets or liabilities.
Here is a more detailed explanation of each option:
- A. Valuation is a part of verification. This is incorrect because valuation and verification are two separate processes. Valuation is the process of estimating the worth of an asset or liability, while verification is the process of ensuring that the information presented in financial statements is accurate and complete.
- B. Verification is a part of the valuation. This is also incorrect because valuation and verification are two separate processes. Valuation is the process of estimating the worth of an asset or liability, while verification is the process of ensuring that the information presented in financial statements is accurate and complete.
- C. Verification has nothing to do with valuation. This is the correct answer because valuation and verification are two separate processes. Valuation is the process of estimating the worth of an asset or liability, while verification is the process of ensuring that the information presented in financial statements is accurate and complete.
- D. Auditor is a valuer. This is incorrect because auditors are not valuers. They are responsible for verifying the information presented in financial statements, not for estimating the worth of assets or liabilities.