What do you understand by outstanding assets and What

What do you understand by outstanding assets and what

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3) What do you understand by "outstanding assets" and "outstandingliabilities" ? What are the duties of an auditor in relation to outstanding liabilities? 4) "An audit implies more than asscertaining the arithmetical accuracy of books of accounts". Comment on this and set out ten debit items of the Profit and Loss Account stating the sources from which accuracy of the charges can be verified. 5) Write short notes on the following : a) Vouching of contingent liabilities. b) Auditor's duties regarding verification of deferred revenue expenditure. c) Auditor's duties regarding verification of the apportionment of expenditure between capital and revenue. d) Vouching of packages and empties. 6.6 Key Words 6.7 Answers to Check Your Progress 6.8 Terminal Questions 6.0 OBJECTIVES Note: These questions will help you to understand the unit better. Try to write answers for them, but do not submit your answers to the University. These are for your practice only. After studying this unit, you should be able to: Explain the meaning and importance of verification in auditing appreciate the methods of valuation applied to different types of assets 0 outline the responsibilities of auditors in respect of verification and valuation apply the principal considerations in verification and valuation of various fixed assets. 6.1 INTRODUCTION We have now reached a stage in the study of auditing where some practical considerations seem to be essential to achieve our objectives of audit. You must have established by now that the entire audit exercise is meant to examine the correctness of the books of account and to get a report from the auditors that the financial statements of the company SHOW a true and fair view of the state of affairs of the business for the period under review. In order to achieve this purpose of audit, however, the auditor has to apply some checks and tests. The technique of verification dnd valuation is one of thoSe checks through which the auditor examines the correctness of the Balance Sheet of the company i.e., the correctness of thc assets and liabilities appearing in the Balance Sheet. This is a process to ensure whether the assets and liabilities as shown in the Balance Sheet are correct in items as well as in their figures, and thatall assets and liabilities of the company as on the date of the Balance Sheet have been properly included therein. If it is not so, tlie auditor has to get the mistakes rectified before he signs those documents, or hai to state clearly in his report about the areas of dissatisfaction in the Balance Sheet. > In this unit we shall discuss the process of verification and different methods of valuation of fixed assets and auditor's responsibility thereto.
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  • Spring '18
  • sai sekhar
  • Balance Sheet, Capital Expenditure, Expense, Generally Accepted Accounting Principles, invoice

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