Auditing marketable securities - assertions Identify at least eight sources of evidence and testing the auditor may use in the audit of marketable securities by major assertion tested
The auditor may use the following sources of evidence and testing in the audit of marketable securities:
Assertion Evidence/Testing
Existence Confirmation of securities held by trustees.
Existence Observation of securities held by the client.
Presentation & Disclosure Review of investment agreements, including specification of collateral.
Presentation & Disclosure Determine management's intent to hold securities as short-term investments or for the longer term and document those intentions in the management representation letter.
Presentation & Disclosure Determine whether securities are properly classified and disclosed as trading, available-for-sale, held to maturity or on the equity method and that any restrictions are appropriately disclosed.
Valuation Review of collateral if the auditor determines that the collateral is important to the valuation of the account.
Valuation Determine fair market value of recorded securities through reference to a credible financial publication or trusted financial website.
Rights Examine securities and related documents to ensure that the investments are in the name of the organization and that there are no restrictions.
Completeness Review of broker's advices evidencing the cost or sales price of the securities and the timing of transactions for cutoff.
Completeness/Valuation Analytical review for reasonableness of interest and dividend income.
Completeness Obtain and foot a schedule of all marketable securities held at period-end.
You might also like to view...
How did the Obama administration differ from the Reagan and Bush administrations with respect to business ethics?
a. It sought to increase environmental protection while decreasing consumer protection regulation. b. It sought to decrease general regulation of business. c. It sought to increase general regulation of business. d. It did not make regulation or deregulation of business a priority.
Normally, all employees who deal with third parties are deemed to be agents.
Answer the following statement true (T) or false (F)
Emit Brasil International specializes in all kinds of products manufactured in Brazil. The firm assists global companies with importing and exporting. It also provides consulting assistance and strategic help on international trade. Emit Brasil is most likely a(n)
A. export department. B. importer. C. multinational corporation. D. strategic alliance. E. trading company.
While the contingency models are effective and can help leaders become more effective, they fail to explain:
a. why leaders fail b. how to train leaders c. how to create change d. why followers lose motivation