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Investment - Audit Process
The investment is held for wealth generation that as interest and dividends on shares and capital growth and loan notice. Recent investments are readily considered and are intended to be held for not much more than one year. Other investments are long term investments.
The investments in associates, subsidiaries and joint ventures utilize special accounting procedures for the preparation of additional financial statements - the group accounts, otherwise identified as consolidated accounts. Like from your earlier studies you must be familiar along with the definitions relating to the group accounts. See an example a broadly, subsidiary is more than 50% under controlled, and a concerned company is one over that an entity has a 'significant influence' as evidenced through at least a 20% on holding. Long term investments can be carried at cost or the lower of cost and revalued amounts market value determined on a portfolio basis decided through the director. The carrying amount of a long term investment must be reduced to identify impairments in price.
Whereas long term investments are carried on market value a consistent policy must be adopted whereof decreases or increases in the carrying amount should either go with the income statement, or through a revaluation account in equity. To the extent such there is no revaluation surplus concerning to a particular asset, other deficit must be charged to income. Whenever assets carried on market value are disposed of the company must adopt a policy of crediting outstanding revaluation surpluses to either retained, or income earnings. Recent investments can be carried on market value or on the lower cost or on market value.
Classification of Individual Business Risk Individual business risk can be low or high impact and low or high likelihood. Here are some illustrations for a satirical magazine.
Managements interest in the accounting system Management needs complete and accurate books of accounts because: There is no other way the business can be controlled; Rec
General phases of control evaluation are: Phase 1: Understand and document • Understand the client's internal control • Document the understanding of internal control o
Contents of Working Papers - Audit The ISA 230 No.3 stresses which audit working papers may always be adequately complete and detailed to enable an experienced auditor along w
Fitri, a sole proprietor in pulic practice, plans to establish a separate department that will provide internal audit service to his audit clients.
Attempts at definition of the 'true and fair' view There following quotations represent authoritative views on the meaning of true and fair view. A true and fair view impli
Q. Walkthroughs for auditor? Walkthroughs provide the auditor with evidence to: 1. Confirm auditor's understanding of the process flow of transactions. 2. Confirm auditor
the availability of audit evidence is necessary but not sufficient condition for absolute reliance on the figure presented for audit
Cost and Authorization - Detailed audit of stock Cost A favor of the auditor this is restricted generally to determining the technique adopted through the organization
Detail work on stocks - Audit of Current Assets Detail work on stocks is imperative in an audit, since there are other review tests that are equally important and these includ
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