In the audit of investment securities, auditors develop specific audit assertions related to the investments. They then
Question:
In the audit of investment securities, auditors develop specific audit assertions related to the investments. They then design specific substantive procedures to obtain evidence about each of these assertions. Following is a selection of investment securities assertions:
1. Investments are properly described and classified in the financial statements.
2. Recorded investments represent investments actually owned at the balance-sheet date.
3. Investments are properly valued at the balance-sheet date. Required: For each of these assertions, select the following audit procedure that is best suited for the audit plan. Select only one procedure for each assertion. A procedure may be selected once or not at all.
a. Trace opening balances in the general ledger to prior-year audit documentation.
b. Determine whether employees who are authorized to sell investments have access to cash.
c. Examine supporting documents for a sample of investment transactions to verify that prenumbered documents are used.
Auditing and Assurance Services
ISBN: 978-0077862343
6th edition
Authors: Timothy Louwers, Robert Ramsay, David Sinason, Jerry Straws