1. VALUATION
1.1. DEFINITION
1.1.1. THE ACCURACY OF THE BALANCE SHEET AND PROFITS OF A BUSINESS RELY ON THE CORRECT VALUATION OF ITS ASSETS AND LIABILITIES . THE VALUATIONIS TYPICALLY CARRIED OUT BY THE OWNER , OFFICAILS OR EXPERTS . THE AUDITOR'S ROLE IS TO REVIEW AND ACCEPT THE VALUATION CERTIFICATES PROVIDED BY THE VALUATERS ENSURING THE VALUES ARE REASONABLE THROUGH APPROPRIATE INQUIRIES
1.1.1.1. TYPES OF ASSETS AND THEIR VALUATION
1.1.1.1.1. FIXED ASSETS :N STABLE IN NATURE . AQUIRED FOR PERMANENT AND LONG TIME USAGE
1.1.1.1.2. WASTING ASSETS : FIXED ASSETS THAT DEPLETE GRADUALLY IN THE PROCESS OF WORKING
1.1.1.1.3. INTANGIBLE ASSETS : CLASS OF FIXED ASSETS WITH NO PHYSICAL OR TANGIBLE EXISTENCE BUT VALUABLE
1.1.1.1.4. FICTITIOUS ASSETS : NOT REALLY ASSET BUT SHOWN AS SUCH IN THE BALAMCE SHEET UNTIL ADJUSTED
2. VERIFICATION
2.1. DEFINITION
3. IT IS A PROCESS WHERE THE AUDITOR PHYSICALLY CHEKS TO CONFIRM THE ASSETS LISTED IN THE BALANCE SHEET ACTUALLY EXIST.IT IS ABOUT PROVING THE ASSETS
3.1. OBJECTIVES
3.1.1. TO MAKE SURE VALUATION IS DONE CORRECTLY
3.1.2. TO GARAUNTEE THE BALANCE SHEET REFLECTS THE ACTUAL STATE OF THE ORGANIZATION
3.1.3. TO VERIFY THE EXISTENCE OF ASSETS IN THE BALANCE SHEET
3.1.4. TO ENSURE ARITHEMATICAL ACCURACY
3.1.5. TO DETECT ANY POTENTIAL MANIPULATION OR FRAUD RELATED TO ASSETS AND LIABILITIES
4. I DEFINITION :
4.1. EXAMING SUPPORTING DOCUMENTS FOR TRANSACTIONS
4.1.1. II OBJECTIVES
4.1.1.1. 1} ENSURE AUTHENTICITY
4.1.1.2. 2} DIFFRENTIATE BEWEEN CAPITAL AND REVENUE ITEMS
4.1.1.3. 3} DETECT ERRORS OR FRAUD IN TRANSACTIONS
4.1.1.4. 4} CHECK TRANSATIONS WITH EVIDENCE FOR ACCURACY
4.1.1.5. 5} ENSURE PRECISE FINANCIAL REPORTING
4.1.1.6. ENSURE BOOK FIGURES ARE RELIABLE
4.1.1.7. CONFIRM TRANSACTIONS MATCH BUSINESS ACTIVITIES AND THE RIGHT ACCOUNTING PERIOD.
4.1.1.8. MAINTAIN ACCURACY IN CALCULATIONS ,BALANCE CARRY FORWARDS , AND REORDING AMOUNTS IN ACCOUNTS
4.1.2. PRINCIPLES
4.1.2.1. VOUCHER MADE IN CLIENTS NAME
4.1.2.2. EVERY VOUCHER AUTHORIZED BY OFFICER
4.1.2.3. SHOULD CONTAIN TRASACTIONS FOR ORGANIZATION AND FOR THE CORRECT PRIOD
4.1.2.4. CHECK VOUCHER DETAILS AND AUTHORIZATION
4.1.2.5. REVENUE STAMP FOR VOUCHERS OVER 5000 RUPEES
4.1.2.6. CANCEL OR MARK CHECKED VOUCHERS
4.1.2.7. VERIFY STATUORY COMPLIANCE
4.1.2.8. COMPARE CURRENT YEAR AND PREVIOUS YEAR FIGURES
4.1.2.9. NUMBER AND DATE ALL VOUCHERS
5. FLOATING ASSETS : SUBJECT TO CONSTANT MOVEMENT OR CHANGES , TEMPORARY USAGE
5.1. EG> CASH , LOOSE TOOLS , STOCK
5.1.1. ORIGINAL COST OR MARKET PRICE WHICH EVER IS LESS