Accounting · Auditing
Which of the following statements is incorrect with respect to validation and verification in auditing?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1While verifying the sale of fixed assets, the auditor should ensure that the profit on the sale of fixed assets is treated as a revenue gain.✓
- 2While certifying cash receipts, the auditor should study the applicable system of internal checks.
- 3The chances of fraud are highest in case of cash sales.
- 4The foreman of each department should be present at the time of payment of wages to prevent impersonation.
Correct answer
While verifying the sale of fixed assets, the auditor should ensure that the profit on the sale of fixed assets is treated as a revenue gain.
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