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Investment & Finance Cycle - Coggle Diagram
Investment & Finance Cycle
Functions of the cycle
Obligations - Interest & Dividends
Application of funds
Raising funds
Opportunities for fraud
Understating long term liabilities
Including fictitious assets
Omitting long term liabilities
Understating depreciation
Characteristics of the cycle
Few transactions
Material transactions
Legal & Regulatory requirements
Investment
Activities
Disposals of FA
R&M of FA
Additions of FA
Documentation
Minutes of Meetings
Invoices
FA Requisitions
FA Register
Capital Budgets
GL Accounts
Financing
Owners equity
Activities
Statutory requirements
Authorisaion for the issue of shares
Share buy backs
Declaration of dividends
Issue of Shares
Borrowings
Activities
Repayment of capital
Interest charged on borrowings
Cash inflow from borrowings
Authorisation required
Documentation
Share certificate
Loan/lease contract
Prospectus
Mortgage bond
Debenture trust deed
Journal voucher
Minutes of meetings
Control Objectives & Internal Controls
Completeness
Sequential numbering
Validity test
Accuracy
Recorded at invoice amount
Depreciation accuracy
Authorisation
Senior management
Recorded in MoM
Recording
Recorded in ledger and register
FA/Ledger reconciliation
Validity
Supporting documentation
Comparison physical to recorded
Classification
According to policy
Improvement capitalised
Cut-off
Recorded at date of receipt or sale
General Controls
Stores in permanent form
Safe guard assets
Adequately insured
EFT Payments
Bank Acc Recon with CB
Independent Recon
Access Controls
Substantive Testing
Substantive analytical procedures
Comparisons of current information to prior year information
Understanding the core of the processes
Detail substantive procedures
Error checking financial
statements and supporting documentation
Assertions
Rights & Obligations
Accuracy & Valuation
Presentation & Disclosure
Completeness
Existence