Verification and Valuation of Assets and Liabilities
One of the most important duties of an auditor in connection with the audit of the accounts of a concern is to verif y the assets and liabilities appearing in the Balance Sheet. He has not only to examine the arithmetical accuracy of the transactions in the books of accounts by vouching only, but he has also to see that the assets as recorded in the Balance Sheet actually exist.
If the auditor fails to verify the assets, he will be held liable as was decided in the case of London Oil Storage Co. Ltd. vs. Seear, Hasluck & Co. (1904). It was held in that case that “the auditor should verify the existence of the assets stated in the balance sheet; otherwise he will ...