Importance of An Accurate Valuation of Inventories

The auditor examines the particular thing to assume himself of its existence. Physical examination requires identification of the item. One must be convinced that he has examined the specific theory which he is supposed to be verification of genuineness and quality.

The applicability of its techniques is restricted to those assets which are either material or some tangible evidence of existence such as count, inventories, fixed property, etc and stock-in-trade should be valued by expert values. As the amounts of debtors and creditors can not be correctly ascertained, the purchaser should be recommended not only to take them over, but merely to collect and pay them on behalf of the vendor and account for the net proceeds, therefrom to him.