This presentation was assigned by Respected Teacher SIR ATTA HUSSAIN SHAH and was presented by SYED ALI GOHAR SHAH In SINDH UNIVERSITY MIRPURKHAS CAMPUS. On the date of Monday 21/10/2019.

2. Presented By:
SYED ALI GOHAR SHAH
Assigned By:
SIR: ATTA HUSSAIN SHAH

3.  Verification:
Verification is a process by which the Auditor or
Auditors examine the accuracy of the assets appearing
in the balance sheet.

4.  Verification Of Assets:
 While conducting verification following points should
be considered by the auditor :-
 Existence:
 Possession:
 Ownership:
 Charge or Lien:
 Record:

5.  Valuation:
Valuation means to conform that all assets are shown
in the balance sheet with their proper book value.

6.  Important of Verification and
Valuation:
 Assets and liabilities are very important aspects of
the business.
Its importance can be highlighted as follows
 To Show The Actual Financial Position.
 To Increase the Goodwill.
 To Assures Shareholders.
 Sale of the Company.
 Easy to Get Compensation.

7.  Difference Between Verification
and Valuation of Assets:
Valuation Verification
1. Valuation is the initial Work. 1. Verification is Final Work.
2. Valuation is the work of
concerned authority.
2. Verification is the work of
Auditor.
3. Valuation checks the amount
shown in the books of accounts.
3. Verification checks the items
shown in the balance sheet.

8.  Classification Of Assets:
 Assets can be classified into the following types:
ASSETS
Current
Assets
Fixed
Assets
Intangible
Assets
Fictitious
Assets

9.  Petty Cash:-
Small amount of money paying small expenses.
E.g. office supplies, entertainment, postage, fare etc.
 An Auditor Should Verify:-
 Petty Cash in hand with Petty Cash book.
 Balances of Petty Cash.
 Vouch the transaction of last month.
 Verification & Valuation of
Current Assets:

10.  Verification & Valuation of
Fixed Assets:
 Plant & Machinery:-
 Vouch the Purchase of Assets
 Verify the Expenditure
 Physical Inspection
 Verify the Depreciation
 Valuation and Disclosure:-
 Verify that Assets have been Valued and Disclose according
to GAAP.

11.  Patents:-
Official Document with Exclusive Rights
 An Auditor Should :-
 Check The Patent Register
 Ensures the Life of Patent
 Verify Renewal Certificate
 Verification & Valuation of
Intangible Assets:

12.  Preliminary Expenses:-
Expenses incurred for incorporating a company
E.g. :- Memorandum, Article of Association, Stamp fees, etc…
 An Auditor Should Verify:-
 Check Receipts of Registration
 Connected Expenses
 Authorization for payment of expenses
 Actual expenditure for preliminary expenses should not exceed
 Verification & Valuation of
Fictitious Assets:

13.  Classification of Liabilities:
Liabilities
Current
Liabilities
Non
Current
Liabilities
Contingent
Liabilities

14.  Verification of Liabilities:
The verification of liabilities implies an enquiry into the
nature, extent and existence of liabilities.
The Auditor should verify:
 Liabilities have been clearly stated.
 Liabilities relate to business.
 They are correct.
 Their actual figures.

15. Case: Westminster Road Construction Co. (1932)
“ It was held that an auditor must make the fullest use of all
the materials available to him and although “He is neither a
stock taker and nor a Valuer”
 An Auditor is not a Valuer: