What do you mean by verification of assets ? Explain the techniques of verification.

The term 'verification' signifies the physical examination of certain class of assets and confirmation regarding certain transactions. Sometimes verification is confused with vouching but they differ from each other on the nature and depth of the examination involved. Vouching goes to prove the arithmetical accuracy and the genuineness of the transactions, whereas verification goes to enquire into the value, ownership, existence and possession of assets and also to confirm whether they are free from any mortgage or charge. The fact of the presence of any entry regarding the acquisition of asset does not prove that the particular asset actually exists on the Balance Sheet date, rather it purports to prove that the asset ought to exist; on the other hand, verification through physical examination and confirmation proves whether a particular asset actually exists without having any charge on the date of the Balance Sheet. Verification of Assets includes verifying the following: The existence of the assets. Legal ownership and possession of the assets. Ascertaining that the asset is free from any charge. Correct Valuation. Techniques of Verification: Inspection: It means physical inspection of the assets i.e. company cash in the cash box, physical inventory, inspection of shares certificates, documents etc. Observation: The auditor may observe or witness the inspection of assets done by others. Confirmation: It means obtaining written evidence from outside parties regarding existence of assets.