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Investment & Finance: Investing (Control obj: (Validity: (Controls:…
Investment & Finance:
Investing
Overview:
Key Docs:
Cap Budget,Minutes,FA Req,FA Reg
Activities:
1.Additions:
Formal proposal to cap ex comm incl quotes & financing method > BOD(minuted) > May need formal contract
2. Disposal:
Proceeds cash/rec. Generally less controls, risk assets disposed still on AFS
3. Repair & Improvement:
Risk expensable items capitalised
Control obj:
Validity:
Controls:
a)Purchases supp by FAReq & Cap Bud b)Regular physical verif by snr official
TOCs:
a)Inspect purchases for supp docs b)Enq proc c)Inspect proof of snr off inspection
Authorisation:
TOCs:
a) Enq pol auth FA b) Inspect proof of auth
Controls:
Snr Man auth & minuted in meeting
Completeness:
Controls:
a)Cap req numerical acc b)Investigation miss nos c)FA rec in FAReg & often verified
TOCs:
a) Inspect cap req for seq & sig b)Inspect FA reg & proof of review
Accuracy:
Controls:
a)FA cost agree INV b) Indp review of dep & other val calcs
TOCs:
a)Enq proc b)Agree purchases to inv c)Inspect for review of calcs
Recording:
Controls:
a)Purch & Disp rec in ledgers & in FA from source docs b) Regular recon FAReg-GL
TOCs:
a) Purch & Disp from CB i) Follow from source - FAReg-GL ii) Agree date,description,category b) Insp recon agree to GL & Source docs c) Insp recon proof of review
Classification:
Controls:
a) Assets class by co pol b) Improvements capitalised & distinguished from repairs
TOCs:
a)Enq proc b)Review FAReg and GL for exp cap in error
Cut-off:
Controls:
Recorded per GRN / DLN
TOCs:
a) Enq cut-off proc b) Test both directions YE & PsYE
General:
Controls:
a)Permanent area store b)Security c) Insured
TOCs:
a) Enq sec proc b)Obs sec c)Insp insurance contract
Substantive Procedures:
Analytical:
a) CY-PY-BD b) Ratio c)Quali & Quanti factors understanding business
Existence:
a)
Add:
Insp for supp docs of auth. Agree details from FAReg-INV(Amt,date,descript) b)
Disposal:
Enq to man. Req insurance claim and inspect. Conf with insurers. Enq re discont op. Ensure 0 in FAReg c)
Repairs&Improvements:
Unusual items. Source docs for material exp
Rights & Obligations:
a)Insp docs entitling ownership or control b)Review minutes for auth of acquisition
Valuation:
a)Reval:
i)Consider if expert valuator used ii)Re-perform
b)Dep:
i)FA Summary for recalc ii)Obtain rates PY WP iii)Enq & Re0perform to ensure rates consistently app iv)Assess reasonableness of estimates
c)Amortisation:
i)Inspect docs supp rights ii) Assess reasonabless of estimations
d)Impairment:
i)Enq man re indicators ii)Discuss assumptions with man & recalc iii) Obtain estimates & determine reasonableness iv)Ensure disclosed v)Consider use expert
e)Accounting Estimates:
i)Review & test process to create for reasonableness ii) Assess assumptions underlying iii)Test calcs iv)PY-AY v)Approval process vi)Comp indp est vii)Review sub events to conf viii) Use expert
Completeness:
a)Identify material purchases follow source to acc records b)Trace assets on hand to FAR