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AUDIT OF INVESTMENTS

INVESTMENTS

• Assets held by an entity for the accretion of


wealth through distribution such as interest,
royalties, dividends and rentals, for capital
appreciation or for other benefits to the investing
entity such as those obtained through trading
relationships.
INVESTMENTS

1. Trading securities of Financial assets @ FVPL


2. Financial assets @ FVOCI
3. Investment in Equity Securities
4. Investment in bonds or FA @ Amortized cost
5. Investment in Associate
6. Investment in Subsidiary
7. Investment in Property
8. Investment in fund
9. Investment in joint venture
AUDIT OBJECTIVES AND PROCEDURES

Assertions
Assertions Audit
Audit Objectives
Objectives Audit
Audit Procedures
Procedures
Existence
Existence or
or Occurrence
Occurrence To
To determine
determine that
that investments
investments 1.
1. Obtain
Obtain or
or prepare
prepare aa listing
listing
in
in securities
securities (shares,
(shares, bonds,
bonds, of
of securities
securities and
and
notes)
notes) physically
physically exist
exist and
and in
in investments
investments owned
owned by by the
the
loans
loans and
and advances
advances exist.
exist. company
company andand related
related
revenue
revenue accounts
accounts andand
reconcile
reconcile to
to the
the general
general
ledger.
ledger.
2.
2. Inspect
Inspect securities
securities onon hand.
hand.
3.
3. Obtain
Obtain confirmation
confirmation of of
securities
securities held
held by
by others.
others.
AUDIT OBJECTIVES AND PROCEDURES

Assertions Audit Objectives Audit Procedures


Completeness To determine that investments 4. In addition to audit
are all included in the procedures 2 and 3, vouch
statement of financial position. selected purchases and sales
transactions of securities
during the year.

Rights and Obligations To determine that the 5. In addition to audit


company owns or has procedures 2 and 3, verify the
ownership rights to all clients’ cutoff of securities
investments included in the transactions.
statement of financial position. 6. Perform analytical
procedures.
7. Compute independently
revenue from securities.
AUDIT OBJECTIVES AND PROCEDURES

Assertions Audit Objectives Audit Procedures


Valuation To determine that investments 8. Determine market value of
are valued properly in securities at statement of
accordance with generally financial position date.
accepted accounting principles. 9. Evaluate the method of
accounting for securities.

Presentation and Investments are properly Evaluate financial statement


Disclosure described and classified in the presentation and related
statement of financial position revenue or loss accounts.
and related disclosures are
adequate.