Question

148. While verifying intangible assets, an auditor would recomputed amortization
charges and determines whether amortization period is reasonable. The auditor tries to
establish ...by doing it
a) Valuation
b) Existence
c) Disclosure
d) Possession
​

Answer 1

Answer:

answer (b) existence

Answer 2

While verifying intangible assets, an auditor would recompute amortization charges and determine whether amortization period is reasonable. The auditor tries to establish Valuation by doing it.

Explanation for the answer:

• Valuation refers to the process of assessing the value of a financial asset.
• Auditors requires valuation for proper assessment of the assets on the balance sheet.
• There are two types of valuation in auditing:
• 1. Valuation of assets & liabilities: The auditor has to check and ensure that the assets & liabilities have been shown at their correct value .
• 2. Finding out the ownership & title of the assets: The auditor has to do Verification that certifies the ownership & the title of the assets shown in balance sheet. .
• Hence, the correct answer among all the options is option a) Valuation.

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