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Chapter 4 Audit Investments

The document outlines the audit objectives and procedures for investments, focusing on verifying ownership, income accrual, and proper financial statement inclusion. It details steps such as analyzing investment accounts, conducting securities counts, and reviewing agreements for liens or pledges. The aim is to ensure investments are accurately represented and disclosed in accordance with relevant financial reporting standards.

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43 views13 pages

Chapter 4 Audit Investments

The document outlines the audit objectives and procedures for investments, focusing on verifying ownership, income accrual, and proper financial statement inclusion. It details steps such as analyzing investment accounts, conducting securities counts, and reviewing agreements for liens or pledges. The aim is to ensure investments are accurately represented and disclosed in accordance with relevant financial reporting standards.

Uploaded by

janyytuls
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd

AUDIT OF

INVESTMENTS
CHAPTER 4
AUDIT OBJECTIVES:
To determine that:

1. Investments exist (held by the entity or the entity's


fund manager) and are owned by the entity.

2. All recorded income from investments has accrued to


the entity at the end of the reporting period.

3. All investments owned by the entity at the end of the


reporting period are included in the statement of
financial position.
AUDIT OBJECTIVES:

4. All income accruing from investments at the end of the reporting period
has been recorded.

5. Investments are included in the statement of financial position at


appropriate amounts. The related investment income is included in the
income statement at the appropriate amount.

6. All investments are free of liens, pledges, or other security interests, or


if not, are adequately disclosed.

7. Investments and related investment income accounts are properly


classified, described, and disclosed in the financial statements in
conformity with PFRS.
AUDIT PROCEDURES
1. Prepare or obtain an analysis of the investment account
and:
Trace to applicable general ledger balances.
Vouch changes during the year by reference to board
minutes and brokers’ advices.
Verify completeness of dividend and interest revenues, and
where necessary, by reference to outside published sources.
Check footings and cross-footings.

2. Conduct securities count and:


Inspect securities as to registered owner.
Reconcile and compare details with investment analysis.
AUDIT PROCEDURES
3. For securities held by an outsider custodian:
Arrange for a visit to the custodian and conduct a count; or
Confirm from the custodian the details of securities held for
the account of the entity.

4. Review minutes, agreements and confirmation replies for


evidence of liens, pledges, or other security interest in the
entity’s investments and commitments to acquire or dispose of
investments.

5. Inspect market quotations, financial statements of


investee(s), and other evidence to determine the current value
of investments.
AUDIT PROCEDURES
6. Discuss with the entity the process used by management in classifying its
investments.

7. Determine whether the client’s investment activities are consistent with its
business model for managing financial assets.

8. Determine whether the decline in fair value of held-for-collection financial assets


below amortized costs is other than temporary and is properly recognized.

9. Verify computations of gains and losses from disposals of investments.

10. Verify calculations of amortization of premium or discount on held-for-collection


financial assets.

11. Determine propriety of financial statement presentation and adequacy of


disclosures.
PROBLEM
SOLUTION
THANK YOU
[Link] To everyone who is present here

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