Learn how auditors should audit investments effectively to ensure accuracy and reliability in financial reporting. Follow these key steps for a successful investment audit.
SCHEDULE
The auditor may check the schedule of investments certified by the officer. He can verify the various investments such as Shares, bonds, debentures and government securities etc
INSPECTION
The auditor may ask to management for the inspection of securities The officer incharge is bound to open the locker and to show the various types of shares and securities held by the company.
LIEN
There may be lien on securities held by the company. The auditor should also confirm from lenders and creditors about the contents of agreement (4) VALUATION ME HIPP
The valuation of securities is made by management.
The valuation is made as lower of cost or market
(5)INTEREST RECEIVED
The auditor can also see that how much amount of interest is collected on investment. The amount collected must be properly recorded in books of firm (6) INTEREST DUE
The auditor can also see that how much amount of interest is due but not received The adjustment of accrued interest must be made for proper record.
GAIN ON SALE
The auditor can check the entry of profit if investment has been sold on profit The auditor can calculate the profit.
LOSS ON SALE
The auditor can (heck the entry of loss if investment has been sold at loss. The auditor should see that exact amount of loss reflected in books.
How can auditors add value in auditing investments?
Auditors can add value in auditing investments by providing insights and recommendations to enhance the company’s investment processes. This includes:
- Identifying areas for improvement: Auditors can identify areas where the company’s investment processes can be improved to enhance efficiency and effectiveness.
- Providing recommendations for risk management: Auditors can make recommendations to strengthen the company’s risk management framework for investments.
- Assisting with compliance: Auditors can help ensure that the company complies with all regulatory requirements related to its investments.
- Offering insights on market trends: Auditors can provide valuable insights on market trends and developments that may impact the company’s investments.
In conclusion, auditing investments requires a high level of expertise and attention to detail. By following the key steps outlined in this article, auditors can effectively audit investments and add value to the company’s investment processes.