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Modern Auditing:Assurance Services and the Integrity of
Financial Reporting, 8th EditionWilliam C. BoyntonCalifornia
Polytechnic State University at San Luis ObispoRaymond N.
JohnsonPortland State UniversityChapter 17 Auditing the Investing
and Financing Cycles
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Chapter Overview
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Nature of the Investing and Financing CyclesOverview of the
CyclesInvesting Activities
Financing Activities
Understanding the Entity and Environment
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Understanding the Entity and Environment
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Investing Cycle Audit Objectives
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Investing Cycle Analytical Procedures
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Investing CycleInherent Risk
Consideration of Internal Controls
Preliminary Audit Strategies
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Substantive Tests for Plant AssetsInitial Procedures
Analytical Procedures
Tests of Details of TransactionsVouch Plant Asset AdditionsVouch
Plant Asset DisposalsReview Entries to Repairs and Maintenance
Expense
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Substantive Tests for Plant AssetsTests of Details of
BalancesInspect Plant AssetsExamine Title Documents and
Contracts
Tests of Details of Accounting EstimatesReview Provisions for
DepreciationImpairment of Plant AssetsTests of Details of
Presentation and Disclosure
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Financing Cycle
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Financing Cycle Audit Objectives
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Financing Cycle Analytical Procedures
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Financing CycleInherent Risk
Consideration of Internal Control
Common Documents and Records
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Financing Cycle Functions and Related ControlsAuthorizing bonds
and capital stock
Issuing bonds and capital stock
Paying bond interest and cash dividends
Redeeming and reacquiring bonds and capital stock
Recording financing transactions
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Preliminary Audit Strategies for Long-Term Debt
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Substantive Tests of Long-Term DebtInitial Procedures
Analytical Procedures
Tests of Details of Transactions
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Substantive Tests of Long-Term DebtTests of Details of
BalancesReview Authorizations and ContractsConfirm DebtRecalculate
Interest Expense
Tests of Details of Presentation and Disclosure
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Preliminary Audit Strategies for Shareholders Equity
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Substantive Tests of Stockholders EquityInitial Procedures
Analytical Procedures
Tests of Details of TransactionsVouch Entries to Paid-in Capital
AccountsVouch Entries to Retained Earnings
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Analytical Procedures
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Substantive Tests of Stockholders EquityTests of Details of
BalancesReview Articles of Incorporation and BylawsReview
Authorization and Terms of Stock IssuesConfirm Shares Outstanding
with Registrar and Transfer AgentInspect Stock Certificate
BookInspect Certificates of Shares Held in Treasury
Tests of Details of Presentation and Disclosure