Ensuring auditability and verifiability in FL is both challenging and essential to guarantee that local data remains untampered and client updates are trustworthy. Recent FL frameworks assess client contributions through a trusted central server using various client selection and aggregation techniques. However, reliance on a central server can create a single point of failure, making it vulnerable to privacy-centric attacks and limiting its ability to audit and verify client-side data contributions due to restricted access. In addition, data quality and fairness evaluations are often inadequate, failing to distinguish between high-impact contributions and those from low-quality or poisoned data. To address these challenges, we propose Federated Auditable and Verifiable Data valuation (FAVD), a privacy-preserving method that ensures auditability and verifiability of client contributions through data valuation, independent of any central authority or predefined training algorithm. FAVD utilizes shared local data density functions to construct a global density function, aligning data contributions and facilitating effective valuation prior to local model training. This proactive approach improves transparency in data valuation and ensures that only benign updates are generated, even in the presence of malicious data. Further, to mitigate privacy risks associated with sharing data density functions, we add Gaussian noise to each client’s local density function before sharing it with the server. We theoretically demonstrate the convergence, auditability, and verifiability of FAVD, along with its resilience against data poisoning threats. Our experiments on five diverse benchmarks, including three medical datasets, show that FAVD achieves significant performance gains, accurate data valuation, and fair client contributions under threat, highlighting its reliability as a trustworthy FL approach.