When assets are undervalued it can create a problem with insurance as well. Most insurance policies insure something for a certain amount of money. For instance most homeowners policies give a certain amount of money for liability and a certain amount for personal property. The same goes for business insurance.
If the assets of the business are undervalued the business may not purchase enough insurance. Then in the event of a loss once everything is appraised by the insurance company the insurance policy may not cover the amount the assets are really worth. This could be extremely damaging for a company.
Companies should definitely make every effort to ensure that their asset and property valuation is correct. This will allow them to adequately protect themselves in case of a loss.