Obtain a sample of investments made by the company and check that the: n
Investments made are authorised and in accordance with the company’s objects.
n
Check that the income on the investments is checked and accrued on a timely basis
For scrap sales check that the sales are made on the most economic terms.
Audit Assertion Addressed
Done by
W. P. Ref.
S. No. 3.
Audit Procedures
Audit Assertion Addressed
Check that procedures are in place to ensure that good material is not transferred to scrap yard.
ANALYTICAL PROCEDURES Compare current year with prior year and budgeted amounts to anyalyse the variation in the expenses. Inquire and document the reasons for variation TEST OF DETAILS 1
Review the marketable securities and related accounts (e.g., interest and dividend income) in the general ledger for unusual items.
Existence
2
Test accrued interest and interest earned during the period on receivables; determine whether interest should be imputed on longterm receivables arising during the period.
Valuation and Measurement
3
Verify interest and dividend income on marketable securities, investments, and equity in earnings (losses) of investees by calculating interest earned or by referring to published records of dividends paid or to the financial statements of investees.
Valuation & Measurement
4
Verify computations of gains and losses from sales of marketable securities and investments.
Measurement
Done by
W. P. Ref.
S. No. 5
6
Audit Procedures Select a sample of assets retired during the period and check: n
Authorisation;
n
Computation of gain or loss on disposal of fixed assets
n
Timely deletion from fixed assets records.
Select a sample of scrap sales, and check for: n
Authorisation;
n
Proper recording of gain; and
n
Receipt of scrap proceeds.
7
Check that all material items have been presented and disclosed in accordance with the requirements of Companies Ordinance, 1984 and IASs.
