balance-sheet audit

Quick Reference

An audit limited to verification of the existence, ownership, valuation, and presentation of the assets and liabilities in a balance sheet. For example, the existence of a building would be satisfied by an inspection and an examination of the deeds would provide evidence of ownership. The valuation of the building could be based on historical cost, in which case the original purchase contract would be examined; alternatively it may have been revalued, in which case the documentation for the revaluation would need to be examined; this may need to be supported by further enquiry. The balance-sheet presentation and disclosures for the building would be checked against the Companies Act and requirements of accounting standards.

Subjects: Accounting.

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