Substantive audit procedures Existence/Occurrence(E/O) Rights &obligations(R/O) Completeness(C) Valuation andallocation/Accuracy(V/A) Presentation& disclosure(P/D) a. Inspect securities on handand confirm securitiesheld by custodian.           b. Trace serial numberindicated in the securityto the list of investmentsecurities maintained bythe client           c. The investment securitieslisted on the schedule ofinvestment transactionsof the client aremathematically accurateand agree with thegeneral ledger.           d. Read minutes of meetingof board of directorsregarding investmentsused as collateral forborrowings.           e. Recalculate gains andlosses on sale ofsecurities.           f. Recalculate interest anddividend revenues.           g. Inspect securitiessimultaneously with countof other liquid assets.           h. Verify fair values ofsecurities with publishedprice quotations.           i. Obtain an understandingon management’s processin classifying investmentsecurities.           j. Evaluate client’sprocedures on assessingimpairment ofinvestments.           k. Perform cut-off test onacquisition and disposalof investments andaccruals of interests anddividends.           Requirement: Check the management assertions that are being validated by the above substantive auditprocedures.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Substantive audit procedures Existence/
Occurrence
(E/O)
Rights &
obligations
(R/O)
Completeness
(C)
Valuation and
allocation/Accuracy
(V/A)
Presentation
& disclosure
(P/D)
a. Inspect securities on hand
and confirm securities
held by custodian.
         
b. Trace serial number
indicated in the security
to the list of investment
securities maintained by
the client
         
c. The investment securities
listed on the schedule of
investment transactions
of the client are
mathematically accurate
and agree with the
general ledger.
         
d. Read minutes of meeting
of board of directors
regarding investments
used as collateral for
borrowings.
         
e. Recalculate gains and
losses on sale of
securities.
         
f. Recalculate interest and
dividend revenues.
         
g. Inspect securities
simultaneously with count
of other liquid assets.
         
h. Verify fair values of
securities with published
price quotations.
         
i. Obtain an understanding
on management’s process
in classifying investment
securities.
         
j. Evaluate client’s
procedures on assessing
impairment of
investments.
         
k. Perform cut-off test on
acquisition and disposal
of investments and
accruals of interests and
dividends.
         

Requirement:

Check the management assertions that are being validated by the above substantive audit
procedures.

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