Final answer:
The goal of financial statement auditing is to affirm that reported assets and liabilities accurately represent the company's property rights and obligations, respectively, using tools like T-accounts and balance sheets to ensure assets equal liabilities plus net worth.
Step-by-step explanation:
The objective of auditing a company's financial statements is to determine that amounts reported as assets of the company represent its property rights and that the amounts reported as liabilities represents its obligations. A T-account plays a crucial role in this process by separating the assets on the left from the liabilities and net worth on the right, ensuring that assets always equal liabilities plus net worth. This fundamental concept is integral to the creation of a bank's balance sheet, which lists all assets, and liabilities, and calculates net worth as bank capital.
For banks, assets include financial instruments like reserves, loans made by the bank, and U.S. Government Securities, while liabilities are obligations like customer deposits. The net worth of the bank, also known as bank capital, is the difference between total assets and total liabilities and is included on the liabilities side to balance out the T-account.