means the act of assuring the correctness of value of assets and liabilities in
the organization. It refers to the examination of proof of title and their
existence or confirmation of assets and liabilities on the date of Balance
Sheet. It usually indicates verification of assets of any organization, which
can be done by examination of values, ownership, existence, possession of any
assets and also ensures that the assets are free from any charge. In simple
words, verification means, ‘proving the truth or confirmation’.
Spicer and Pegler defines Verification as, “An inquiry into the value, ownership and title,
existence and possession and the presence of any charge on the asset”.
J. R. Batliboi defines it as, “The auditor must satisfy himself that
assets really existed at the date of the Balance Sheet and were free from any
charge and that they have been properly valued”.
The Institute of Chartered Accountants of India defines
verification as, “It aims at
establishing (a) existence, (b) ownership, (c)
possession, (d) freedom
from encumbrances, (e) proper
recording, (f) proper valuation”.
objectives of verification are as follows:
To show the correct value of assets and
To know whether the Balance Sheet exhibits a
true and fair view of the state of affairs of the business.
To find out the ownership, possession and title
of the assets appearing in the Balance Sheet.
To find out whether assets are in existence.
To detect frauds and errors, if any while
recording assets in the books of the concern.
To find out whether there is an adequate
internal control regarding acquisition, utilization and disposal of assets.
To verify the arithmetic accuracy of the
To ensure that the assets have been properly
auditor of a business is required to report in concrete terms that the Balance
Sheet exhibits a true and fair view of the state of its affairs. In other
words, he has to examine and ascertain the correctness of the money value of
assets and liabilities appearing in the Balance Sheet and this examination is
known as verification of assets and liabilities. Therefore, an auditor has to
keep in mind the following points while verifying the assets:
Ensuring the existence of assets.
Acquiring the assets for business.
Legal ownership and possession of the assets.
Ensuring the proper valuation of assets.
Ensuring that the assets are free from any