U&IR CPAS

Budgeted hours :

Investment Actual hours :

Client Year-end

AUDIT OBJECTIVES

The objectives in auditing investments are to determine whether:

1. The physical evidences of the ownership of investments are on hand or held in custody or safekeeping by others for account of the
company.

2. The basis on which the investments are stated is in accordance with GAAP, consistently applied.

3. Income from investments has been accounted for properly.

4. Classification and description of investments and related income are proper in the financial statements.

5. Adequate disclosures have been made in the financial statements.

AUDIT PROCEDURES Ref. Done by Date

I. Investment in shares of stocks


1. Obtain a schedule of investments showing amounts and number of shares at the
beginning of the period, additions, disposals and ending balance.


2. Check clerical accuracy of the schedule and trace beginning balance to prior years
working papers and ending balances to trial balance.


3. Determine cost and basis of amounts carried for such investment.

4. With respect to investments accounted for under the equity method, obtain complete
information as to parents companys equity in:

a. net assets
b. undistributed earnings since acquisition
c. earnings, losses and distributions for the period under review.

II. Other Investment


1. Obtain schedule of other investment and agree balance with the trial balance.

2. Account for and obtain full information for determination of cost, basis of amounts
carried and changes during the year.


3. Check income received during the period and compute accrued income.

4. Confirm cash surrender value, beneficiary, etc., of life insurance policies. Reconcile
premiums paid and increase cash surrender value during the period and prepaid
premiums at the beginning and end of period with life insurance expense.





U&IR CPAS
Budgeted hours :

Investment Actual hours :

Client Year-end

III. Review and Conclusion

1. Prepare audit memo. Ensure that all appropriate matters to be included in the
managements representation letter have been made.


2. List down management letter points.

3. Clear all review points.