How Would You Audit Balance Sheet?

Balances of all assets and liabilities should be checked from the trial balance into the balance sheet. Every assets or liability should appear under its appropriate head. Addition to fixed assets should check to see that they represent real capital expenditure. Leases or title deeds of landed properties should be inspected. Depreciation on assets should be looked into to see that is consistent and adequate. Stock certificates should be seen and mode of valuation should be shown on the balance sheet. Sundry debtor's list should be scrutinized to ascertain the debts of long standing.

Check carefully the proper valuation of stock in trade, investments, book debts, patents, copy rights, live stock, stock in process, uncompleted contracts etc. investment should be verify by actual inspect or with banker's certificate. Advances to staff and other loans advanced should be verified with relative vouchers. Bank balances should be verified with pass books, reconciliations and bank certificates. Cash on hand should be checked by actual count.

Loans borrowed should be verified with relative documents. Sundry creditors list should be scrutinized and the balances should be checked with statements from creditors. All outstanding liabilities should be found out and brought in. Any contingent liabilities should be stated by way of foot note.