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An important review procedure for investments is to
The purpose of the review procedures is to ensure that the transaction recorded follows policies and has an audit trail. The auditor will ensure that the underlying detail supports the asset being recorded.
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The investment financing cycle refers to:
The investment financing cycle covers the firm’s portfolio of assets on both a long term and short-term basis. This cycle covers the management of excess assets to create a return.
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In auditing the investment cycle the auditor would most likely
All of the above are necessary when auditing the investment cycle. Every cycle needs controls to determine transactions are properly recorded, measured, and disclosed.
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In auditing intangible assets, an auditor would most likely review or recompute and determine whether the amortization period is reasonable in support of management's financial statement assertion of:
Assertions about valuation and allocation deal with whether assets, liabilities, and equity interests have been included in the financial statements at appropriate amounts. Recalculation of the amortization and review of the amortization period would test the valuation and allocation assertion.
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In confirming with an outside agent such as a financial institution that the agent is holding securities in the client's name, the auditor most likely gathers evidence in support of management's financial statement assertions of existence and:
A confirmation from an outside agent indicating that securities are being held in the client's name provides evidence with respect to both the existence assertion and the rights and obligations assertion.
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The investment cycle requires strong segregation of duties over all of the following except:
In any business process or environment, record keeping should be separate from authorization which should be separate from custody.
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