Point out the difference between ‘Verification’ and ‘Valuation’ of assets. Discuss the objectives of verification of assets.

Verification and valuation of assets are fundamental concepts in the auditing process, with each serving a distinct purpose. These two procedures, though related, are different in terms of their scope, objectives, and the approach auditors take when applying them. To comprehend the difference and the objectives of verification, it's essential to break down each term clearly.

Difference between ‘Verification’ and ‘Valuation’ of Assets

Verification refers to the process of confirming the existence, ownership, and condition of assets as recorded in a company's financial statements. It ensures that the assets listed are genuine, legally owned by the entity, and physically present as reported. Verification can involve checking the physical assets, inspecting supporting documents such as purchase receipts, invoices, contracts, and cross-checking with third-party confirmations or legal title deeds. Verification is essentially about the existence and legitimacy of the assets.

On the other hand, Valuation involves assessing the monetary worth or value of an asset. While verification checks if an asset is present and valid, valuation examines how much the asset is worth in financial terms. The valuation could be based on various methods such as ______ ___ ____ _______ __________ _______ ________.
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