The essential documents for verification of freehold land
A. Rights statement
B. Receipt of contractor
C. Lease receipt
D. Both A and B
Answer: Option D
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Related Questions on Auditing
A. 2, 1, 3, 4, 5
B. 1, 2, 3, 4, 5
C. 5, 1, 4, 3, 2
D. 4, 1, 3, 2, 5
Auditing and accounting are concerned with which of the following financial statements?
A. Auditing uses the theory of evidence to verify the financial information made available by accountancy
B. Auditing lends credibility dimension and quality dimension to the financial statements prepared by the accountant
C. Auditor should have a thorough knowledge of accounting concepts and convention to enable opinion on financial statements
D. All of the above
The essential documents for verification of freehold land include the Title Deed (or rights statement), which proves ownership, along with a recent Encumbrance Certificate and sometimes a contractor's bill for improvements, but in the context of typical audit questions, it focuses on title documentation. The correct option is generally A. Rights statement (Title deed).
Title Deed (Rights Statement): This is the primary document establishing ownership.
Encumbrance Certificate (EC): Confirms the property is free from legal liabilities or loans.
Contractor Receipt: Sometimes used if a building was created by the client to prove cost, but the Title Deed is the ultimate verification.
Lease Receipt: Only applies to leasehold properties, not freehold, as freehold implies permanent ownership without lease.
Therefore, based on the choices, A. Rights statement is the most accurate answer.
Correct Answer: A. Rights statement
Explanation:
For verification of freehold land, the auditor must check documents that prove ownership and title.
The most important document is: