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FINANCE AND INVESTMENT CYCLES For the purchasing of fixed assets,…
FINANCE AND INVESTMENT CYCLES For the purchasing of fixed assets, expansion or replacement of worn out assets and obtaining funds to finance said activities.
Mainly deals with: few material transactions, governed by legal or regulatory requirements.
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Applications of finances raised 
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INVESTMENT ACTIVITIES:
ADDITION OF ASSETS:
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When approved, supporting documentation is filed or formal contracts are signed.
DISPOSAL OF ASSETS:
Usually there are less formal control, so care should be taken that disposed assets are excluded from the Statement of Financial position
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DOCUMENTS REQUIRED: Capital budgets, Fixed asset requisition with quoted/negotiated prices, Minutes, Invoices, Fixed Asset Register and General ledger accounts
FINANCING ACTIVITIES:
BORROWINGS:
Activities Include: Authorisation, cash inflow and capital sum repayment of borrowings and interest charged
Documents required: Minutes, Debenture trust deed, Loan/lease contract, Mortgage bond and Journal voucher
OWNERS EQUITY:
Activities include: Authorisation, issue and buy-back of shares, statutory requirements and declaration of dividends.
Documents required: Minutes, Prospectus, Share certificate, Journal voucher
CONTROL OBJECTIVES AND INTERNAL CONTROLS: Control objectives is the goal that the company wants to achieve by implementing internal controls.
CONTROL OBJECTIVES:
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INTERNAL CONTROLS
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3) Numerical accounts with regular follow ups and regular comparisons between the fixed asset register and fixed assets.
4) Records at invoice amount with depreciation and other calculations done by a computer or if manually done, then independently reviewed.
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6) Classified into respective categories with improvements being capitalised and maintenance expensed.
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8) Fixed assets are permanent on company property, should be safe-guarded and completely insured.
WEAKNESSES AND RISKS:
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EXAMPLE: A jewelry store leaves their stock in the glass display counters. The weakness would be that the items are not properly safe-guarded in a vault at the end of the day while the risk would be that the items could be stolen