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Capital and investment cycle (Investments (Inherent risks (Valuation…
Capital and investment cycle
STRATE
CSD
CSDP
Contolled
Uncontrolled
Investments
testing
QxP
R&O
Collateral, minutes
Certificates or STRATE
Existence/occurrence
Register
Certificates or strate
authorisation to sell or purchase
Contracts
Completeness
Minutes
TX at year end
Interest and dividends
Custodian
Valuation and Allocation
Invoices and Cost
Published prices
Impairment
P&L with realisation
Classification
Inherent risks
Unlisted
FV hierearchy
Valuation
3rd party
expert
own
methodology
assumptions
Data
Models
disc cf
B&S
Dividend yield
P/E
NRV
ETC.
Transaction did not take place (occurence)
Put option contract details
Minutes to decision authorisation
Existence of the details with the party
Inappropriately applied (classification)
Inception of hedge requirements as per ias 39 and ifrs 9
Evidence ofhedge effectivity
Evidence of ongoing assesment
Reposting of fair value adjustments
Fair valuebeing incorrect (accuracy)
Reperform management’s estimate
Reasonableness of assumptions
Independent valuation usinf pricing model
Expert to value
Independence
Qualifications and expertise
Assumptions
Results
Disclosure and risk
Obtain a credit worthiness report on a listed banksand compare the instruments listed with those of the bankwe used
Derivatves
Process
Pre engagement
High volume additional skill
Experts
Knowledge and skill
Planning
Knowledge of business
Industry
entity
Front office
Middle office
Back office
Bank
Risk Committee
Controls
Authorisation
Info Processing
Review
Safeguarding assets
Segregation duties
General
Materiality
Not based on SFP alone
Response
Overall
Assertion level
Timing
Extent
Nature
:timer_clock:
extent
Risk assessment
Romm
Detection risk
Materiality
Overall response
Approach
Programmes
Further procedures
Management rep
Purpose
Terms
Accounting
completeness
embedded
compliance hedge criteria
Subst Procedures
Completeness
Counterparties and agree to the contracts in books
Minutes for anything not recorded
Settlement dates etc
Existence
confirmation
Terms and conditions
Minutes of meeting
Accuracy, Valuation and Allocation
Obtain Schedule
Recalculate
Compare to totals
Management Rep Letter
Expertise Valuation
Recalculate values
Reperform Recon
Terms and condition verification
Exchange rate
Currency
Nominal Amount
Commencement date
Settlement date
Moody's Website
Reasonableness of forward rate with economic publications
Carry through to the generalledger and trial balance
Limitations are very imortant in trading
Romm v&a
Fair value incorrect due to reasons………
Manipulated to increase asset value
May be overstated if bnk is unableto honour payments