Unit 1: Finance and Investment Cycle

Unit 1: Finance and Investment Cycle

INVESTMENT ACTIVITIES

FINANCING ACTIVITIES

Key documents

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• Accumulated depreciation

• Profit/Loss on disposal

• Depreciation

• Fixed Assets

General Ledger accounts:

Fixed Asset register

Invoices (purchases and sales)

Minutes of Board of Directors (authorisation of purchases and sales)

Fixed Asset requisition with quote/negotiated prices

Capital budgets

1) ADDITIONS OF FIXED ASSETS

2) DISPOSAL OF FIXED ASSETS

3) REPAIR AND MAINTENANCE OF ASSETS

Key Documents

Minutes of shareholders/directors

Debenture trust deed

Prospectus

Share certificate

Loan/lease contract

Mortgage bond

Journal voucher

Financial statement assertions

Existence

Completeness

Rights and obligations

Valuation

Completeness

Presentation and disclosure

Control objectives

Test of controls

Internal controls

refers to the way we test whether the internal controls are working as designed

refer to certain objectives that the organisation wants to achieve with regards to every transaction

refer to the control activities that the organisation should implement to ensure they achieve the desired objectives

Substantive testing

is an audit procedure that examines the financial statements and supporting documentation to see if they contain errors.