Consider the following activities
1. Valuation
2. Verification
3. Vouching
The correct sequence of the activities undertaken by an auditor is

Solution (By Examveda Team)

The correct answer is Option B: 3, 2, 1
Let's break down why this is the correct sequence for an auditor's activities:

1. Vouching: This comes first.
    Vouching means examining documents to support transactions.
    The auditor checks the original documents (like invoices, receipts) to confirm that the transactions actually happened and were recorded correctly.
    Think of it as the foundation: You need to prove a transaction happened before you can assess its value or verify its existence.

2. Verification: This comes second.
    Verification is about confirming the existence, ownership, and possession of assets and liabilities.
    The auditor obtains evidence (not just documents) to confirm what the company owns and owes.
    For example, physically inspecting inventory or confirming bank balances directly with the bank.
    You first want to make sure it is actually there before valuing it.

3. Valuation: This is the final step.
    Valuation means determining the correct monetary value of assets and liabilities.
    Only after the auditor has vouched for the transactions and verified the existence of the assets/liabilities can they assess whether they are recorded at the correct value according to accounting standards.
    Think of it this way: you need to know *what* exists (verification) and *that* it happened (vouching) before you can determine *how much* it's worth (valuation).

Therefore, the logical sequence is Vouching → Verification → Valuation (3, 2, 1).