THE EFFECT OF THE PROCESS OF VERIFICATION AND VALUATION OF ASSETS IN AN OIL AND GAS COMPANY
1.1 BACKGROUND OF THE STUDY
The fact that there was an entry has been found the purchase of asset and which ‘entry has been to be correctly recorded is not proof that the assets is in possession of the concern at the date of the balance sheet. It is possible that after the asset has been acquired and the necessary entries made in the books of accounts, that asset might have been disposed o pledged or mortgage but no entry has been made regarding these facts in hence, the objects of verification of assets is the satisfactory by the auditor as to its existence proper valuation, correct ownership, proper valuation, discourse etc on the balance sheet. Verification is the method used to prove the authority of the recorded amount of asset. It has to do with balance standing in the books of a company. Valuation, on the other hand, is the method used to as certain the values of assets at the end of the accounting period. In the early of auditing, the prime qualification for the position of an auditor was reputation. A man known for his integrity, objectivity and independence of the mined would be sought for this honored position, thereby, making matters of technical ability entirely. In the early of auditing, the prime qualification for the position of an auditor was reputation. A man known for his integrity, objectivity and independence of the mined would be sought for this honored position, thereby, making matters of technical ability entirely secondary. Consequently, his functions were never confused with that of an accountant.
Gradually, annual report and accounts of companies were often prepared by directors fore the consideration of shareholders, many group of person i.e. stockholder potential investors, trade union Bankers, people who were interested in amalgamation, mergers and take-over. All these people must be sure that the financial statements can be relied upon. The accuracy of the financial statement and that of the estimates of the trading results depends almost entirely upon assets. The question here now is that, can the stakeholder and shareholder believe in the reports of directors without verification and valuation of the companies’ assets These questions led to the appointment of an independents experts, called the “auditor”, who will investigate and report on the financial state of the organization. He will carry out verification of all the assets considering the cost, authorization, valuation, existence etc. This verification is the lapses in the company’s books of accounts and to ensure conformity with the accounting policies all relevant statement of accounting standards as well as the international accounting statements.
1.2 STATEMENT OF THE PROBLEM
In view of the inherent problems experienced in valuation of assets which are caused, by various factors such as. Wear and tear even due to instability in change rate, one of the specified researches against the law of the company. Secondly, is to address the problem of adequately of valuation method to use and to also address the problem adequacy of the company’s terms of verifying and valuating of the company’s assets, and to confirm the accuracy of genuineness of the balance shown in the books. Finally, an attempt to find answers to the problem question that will help to proffer a tasting solution on the verification and valuation for management to use in arresting the situation but it is paramount for management to determine the best method to use at a particular period. The view of these research findings is to address these problems.