To examine the existence of assets
To examine the ownership of assets
Proper explanation of mortgage or charge
All of the above
Answer is Right!
Answer is Wrong!
The correct answer is D. All of the above.
The objectives of verification of assets are to:
- Examine the existence of assets. This means that the auditor must ensure that the assets that are recorded in the financial statements actually exist. This can be done by inspecting the assets, confirming their existence with third parties, or reviewing supporting documentation.
- Examine the ownership of assets. This means that the auditor must ensure that the company owns the assets that are recorded in the financial statements. This can be done by reviewing the title documents for the assets, confirming ownership with third parties, or reviewing the company’s records of ownership.
- Proper explanation of mortgage or charge. This means that the auditor must ensure that the company has properly disclosed any mortgages or charges on its assets. This can be done by reviewing the company’s financial statements, confirming the existence of mortgages or charges with third parties, or reviewing the company’s records of mortgages or charges.
Verification of assets is an important part of the audit process. By verifying the existence, ownership, and proper explanation of mortgages or charges on assets, the auditor can help to ensure that the financial statements are accurate and reliable.