In auditing, verification of an asset mainly seeks to establish its existence, ownership, and what other factor?
Correct answer: B. Valuation
- A. Profitability
- B. Valuation
- C. Liquidity
- D. Turnover
Explanation
Asset verification examines whether the asset exists, belongs to the entity, and is stated at an appropriate value. Profitability, liquidity, and turnover are broader financial analysis measures, not the main elements of asset verification.
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About Auditing
Auditing examines accounting records and financial statements to determine whether they present a reliable and fairly stated position. The subject covers audit objectives, internal controls, audit evidence, materiality, vouching, verification, working papers, auditor independence, audit reports, and the distinction between an audit and accounting or investigation.
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