For the year ended 2010, Jocelyn Morris, CPA, has been engaged to audit Rogers, Inc, who is a continuing client. Jocelyn has assessed the control risk for the company at the maximum for all financial statement assertions involving investments. Jocelyn determines that Rogers is unable to exercise significant influence over any investee and there are no related parties. Morris receives an investment analysis from Rogers’ management revealing the following:
There is a notation indicating that all securities are either in the treasurer’s safe or held by an independent bank custodian.
Investments are classified as current or noncurrent.
The beginning and ending balances are shown at cost and market.
Unamortized premiums or discounts are associated with bonds.
The face amount of bonds or number of shares of stock are given for the beginning and ending of the year.
Accrued investment income for each investment at the beginning and ending of the year is presented.
Investment income earned and collected is presented.
Valuation allowances at the beginning and ending of the year are shown.
Any sales or additions to portfolios for the year include date, number of shares face amount of bonds, proceeds, cost, and realized gain/loss.

Explain the objective for each of the listed primary financial statement assertions relative to investments.

  • CreatedJanuary 21, 2015
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