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What are the objectives of the verification of assets? (i) to ensure the existence of an asset (ii) to ensure the ownership (iii) to ensure the possession (iv) to ensure the lien

What are the objectives of the verification of assets? (i) to ensure the existence of an asset (ii) to ensure the ownership (iii) to ensure the possession (iv) to ensure the lien Correct Answer (i), (ii), (iii) and (iv)

The correct answer is (i), (ii), (iii) and (iv)
Key Points

Verification of assets: It is an activity performed by the auditor in the process of auditing where he verifies the value, ownership, existence, possession of the assets under the name of the company. He also checks whether the assets are placed as collateral security for acquiring finance

Important Points Objectives of Verification of Assets

  • Ensure that the assets were in existence on the date of the balance sheet.
  • Ensure that the right of ownership of the assets vested in or belonged to the undertaking.
  • Ensure that they are free from any lien or charge, not disclosed in the balance sheet.
  • Ensure that the assets are in possession of the rightful owner.
  • Ensure that asset values are correctly disclosed in the balance sheet.
  • Ensure that they are correctly valued having regard to their physical condition.

Additional Information Lien on assets: A lien is a legal right of a lender on the assets of the borrower when the assets are placed as collateral security in acquiring the loan. The borrower/owner cannot sell the property that is the subject of a lien without the permission of the lien holder.

Related Questions

In the question below, are given a statement followed by three courses of actions numbered I, II and III. On the basis of the information given, you have to assume everything in the statement to be true, and then decide which of the suggested course of action logically follow (s) for pursuing. Statement: Reliance Jio Infocomm, the most recent entrant in India’s telecom service sector, may be more adversely affected by the Supreme Court order curbing the use of Aadhaar than older rivals Vodafone Idea and Bharti Airtel. The apex court order disallowing telcos from using the faster Aadhaar-based verification system could slow the pace of subscriber additions significantly, potentially delaying the company’s plan to acquire a 50% revenue market share. The Mukesh Ambani-owned telco has been adding many more subscribers every month than its rivals.  Courses of action: I. Jio’s gross customer additions could decline in the coming months as the verification process will henceforth be a more cumbersome affair, which could also be a turn-off for potential new users who’ve been lately used to instant connectivity under the Aadhaar-based enrolment mechanism.  II. Customer verification expenses will increase in step with the volume of customer acquisition of telcos and so, stronger the monthly user additions, higher the associated verification costs.  III. The more tedious verification process henceforth is also likely to slow down the processing of porting requests from customers.
Consider the following pairings of Non-Performing Assets (NPA) classification in India with their descriptions: 1. Substandard assets : Assets which have remained NPAs for a period less than or equal to 12 months. 2. Doubtful assets : Assets which have remained in the substandard category for a period of 12 months. 3. Loss assets : Assets which are considered uncollectible and of such little value that their continuance as a bankable asset is not warranted, although there may be some salvage or recovery value. Which out of the above pairings are correct?
What are the objectives of verification of liabilities? (i) to ensure the existence of a Liability (ii) to ensure the ownership (iii) to ensure proper valuation (iv) to ensure the obligation
Choose the correct answer
(1) A trustee may also be a beneficiary and can be the sole beneficiary
(2) A trustee may also be a beneficiary, but cannot be the sole beneficiary
(3) A donor may also constitute himself a trustee, and though remaining in possession, may transfer legal possession by declaring his possession as donee's.
(4) A donor may also constitute himself a trustee, and though remaining in possession, cannot transfer legal possession by declaring his possession as donee's.
Consider the following statements.
1. In case of standard assets, provision for NPA must be 25% for all types of standard assets.
2. In case of sub-standard assets, provision for NPA must be 10% for all types of standard assets.
3. In case of doubtful assets, 100% provision is required for unsecured and secured advances.
4. In case of loss assets, 10% of unsecured and 100% of secured advance must be kept as provision for NPAs.
Which of the statement(s) given above is/are correct?
The question below consists of a set of labelled sentences. These sentences, when properly sequenced form a coherent paragraph. Select the most logical order of sentences from among the options. P - A Non-performing asset (NPA) is defined as a credit facility in respect of which the interest and/or installment of Bond finance principal has remained ‘past due’ for a specified period of time.  Q - Once the borrower has failed to make interest or principal payments for 90 days the loan is considered to be a non-performing asset.  R - 'Non Performing Assets' have been in the news recently. S - It must be noted, Non-performing assets are problematic for financial institutions since they depend on interest payments for income.
In the following passage, some of the words have been left out. Read the passage carefully and select the correct answer for the given blank out of the fouralternatives.
______________________ the Troubled Asset Relief Program (TARP), the government had purchased assets of struggling banks with a view _______________ ensuringthat they did not collapse taking ____________________ them the rest of the financial system. These assets __________________ later at a profit by the government! TheU.S. government had acted smartly, while in the Indian case the banks now find themselves ______________________ with loans made by them to an individual withnegative net worth.
______________________ the Troubled Asset Relief Program (TARP)
In the following passage, some of the words have been left out. Read the passage carefully and select the correct answer for the given blank out of the four alternatives.
______________________ the Troubled Asset Relief Program (TARP), the government had purchased assets of struggling banks with a view _______________ ensuring that they did not collapse taking ____________________ them the rest of the financial system. These assets __________________ later at a profit by the government! The U.S. government had acted smartly, while in the Indian case the banks now find themselves ______________________ with loans made by them to an individual with negative net worth. (TARP), the government had purchased assets of struggling banks with a view _______________
In the following passage, some of the words have been left out. Read the passage carefully and select the correct answer for the given blank out of the four alternatives.
______________________ the Troubled Asset Relief Program (TARP), the government had purchased assets of struggling banks with a view _______________ ensuring that they did not collapse taking ____________________ them the rest of the financial system. These assets __________________ later at a profit by the government! The U.S. government had acted smartly, while in the Indian case the banks now find themselves ______________________ with loans made by them to an individual with negative net worth. These assets __________________ later at a profit by the government!
In the question below, are given a statement followed by three courses of actions numbered I, II and III. On the basis of the information given, you have to assume everything in the statement to be true, and then decide which of the suggested course of action logically follow (s) for pursuing. Statement: The India Risk Survey 2017 report ranks 'Information & Cyber Insecurity' as the biggest risk facing Indian companies. Indian organizations, both public and private, had witnessed over 27,000 incidents of security threat, from January 2017 till June 2017 alone. Phishing, scanning/probing, website intrusions and defacements, virus/malicious code, ransomware, Denial of Service attacks, and data breaches are some ways in which hackers attack business websites, which can cause operational disruptions and potentially steal sensitive information. Small and medium businesses (SMBs), unfortunately, have been seeing rising incidences of cybercrime. In fact, 70 percent of cyberattacks occur at organizations with lesser than 100 employees  Courses of action: I. Mandate basic security practices and policies for all employees, such as 2-factor authentication, internet use guidelines and create and enforce rules on handling and protecting sensitive data. Conduct frequent training to sensitize employees about opening suspicious emails, encrypting their data, using strong passwords on their devices, installing security apps, and limiting activity over public Wi-Fi. Implement and enforce incident reporting to help ensure that even the smallest breach is report to management as well as the IT teams. II. Basics still matter and are some of the best defenses against viruses, malware, and other online threats. Assess the assets that are most at risk - data, servers, network - and ensure that the systems are updated with the latest security software, web browser, and operating system. Implement firewall security and run antivirus software after each update.  III. Ensure regular backup of all critical data - whether stored in-house or on the cloud. Run scheduled attack drills and stress tests to identify vulnerabilities and ensure that data restoration and business continuity are executed as planned.