Long Terminvestments Auditprocedures

Completed by Reviewed by 20.
101
Year End: December 31, 2021
Long-term investments - Audit procedures
(For portfolio investments, see 120.101 - Investments - Audit procedures)
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Name: Detailed audit response - INT toolkit
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Assessed risks at financial statement level (High, Moderate or Low) from Form FSA. tan rig rov nt
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Have the assessed risks changed from
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the previous period? if yes, explain.
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A. Substantive procedures - basic
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B. Substantive procedures - extended (sampling, fraud,re e
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International Engagement Forms - Audits
Completed by Reviewed by 20.101-1
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A. SUBSTANTIVE PROCEDURES - BASIC u nt pyr pro ent
2. Analytical procedures c cCoE AV Low Co d is um Analytical ent 2.00 7/31/2010
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Develop and document expectations for the period-end long-term or
strategic investments based on information obtained from n a e n da d o
understanding the entity.
s io u m na rke e d erm ed
Investigate significant changes or trends in the:
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m
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 Long-term investments to the previous period (overall).ro
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 Classification or composition of long-term investments
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previous period.
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 Income or losses from long-term investments to the previous
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Document findings.
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3. Schedule
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s p v id C E yAVo Low ent ewin Schedule 2.00 7/31/2010
U e for the r o n m i
ofthe name,
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period, categorized by type of investment
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percentage ownership, accounting treatment
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opening balance, changes during L the e
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purchase or disposal of long-term investments
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proposed accounting treatment.
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d. Ask staff familiar with investments about
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 Any unrecorded or unusual investments or investment
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activity.
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 Any off-balance sheet or special purpose entities.
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4. Ownership
l A C E AV Lowt is and doc umOwnership k 1.00 7/31/2010
Review the accounting requirements of the applicable financial n a e n da d o c ar
reporting framework and then perform the following:
s io u m na rke e d erm ed
a. Identify changes in ownership during the period, and whether
f es it o c Ca
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w at ens
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affected the entity's ability to exercise significant influence
i
Th ant s w atio . T ee
control.
Review the ownership percentages for each rcategory ed of
nt Thi
b.
investment and ensure the accounting treatment
rte used is Y ©
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Identify any assets transferred to, aCjoint venture in exchange c c l
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5. Component entities
U e s rp o v n y m ie Component 1.00 7/31/2010
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OC ofPGroup pu o p or a ocu an
entities
Where other firms are engaged to audit components
ensure the requirements of ISA 600 –DAudits ro ofFinancial
the group,
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Statements have been met. This standard d
requires: tion ly t d
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6. Significant influence 4.00 7/31/2010
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Where the entity's accounting treatment presumes that the entity has
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significant influence over the investee, ensure:
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a. Management has the ability to exercise significant influence
c co C o is um ent
is and oc um k
according to the indicators outlined in the appropriate financial
reporting framework. l A t r
b. For new investments or changes in ownership during the
ona en ada ed d doc ma d
period, examine any legal documentation to verify percentage
s si c um an ark he ter se
ownership and legal structure. e o f C rm t a
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c. Where significant influences are presumed to exist, but
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explanations and documentation to support the
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not have significant influence are reasonable.
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7. Impairment 5.00 6/1/2018
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Examine the financial statements of the investee and inquire if there
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has been a loss in value that is other than a temporary decline.
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Factors that may have a negative impact on the investment's ability
to sustain a level of earnings to support the carrying amount include:
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 Inability to generate operating profits. l A t is and oc um k
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 Adverse industry or geographic conditions.
 Deteriorating financial position. s si c um an ark he ter se
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 Contingent liabilities such as material litigation or regulatory
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 Inability to pay interest payments or dividends.re © nta his stra se. e
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 The investment is unlikely to be held long
anticipated recovery in fair value. Ch
arenough to allowNforLY any
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 A third party has downgraded a
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pessimistic outlook.
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8. Investments - equity method
D companies Pr andiojointn ventures o f o o a n Investments - 4.00 6/1/2018
For investments in subsidiary, affiliated
E d y t d l d th equity method
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PL er sistdocumented. ra ole use tua the
accounted for using the equity method:
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a. Ensure the percentage
h a for
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to r on use
seor affiliate.
b. Obtain audited financial reasonably
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or subsidiary
close to that of the investor
f n t
c. Note the difference between the carrying
l iceamountnoof the pea for
investment and the amount of thesunderlying
i isnet apand
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ensure the difference has been appropriately
n d t
accounted
o for.
a n
d.
reporting practices. i ll
Consider the impact of any differences in accounting policies or
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e. Where financial statements have been prepared using
accounting principles that differ from the entity's financial
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nt yr pro ent
reporting framework, consider the effect of differences in
accounting principles on the overall financial statements.
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9. Investments - proportionate or full consolidation
c cCoE AV (Med)ium Co d is um Investments e nt - 1.00 7/31/2010
A i s n oc m
nt da a d d ocu or afullrk
proportionate
al
For investments in subsidiaries, affiliated companies and joint
ventures which are consolidated or proportionately consolidated: n e
io m na rke e d erm ed
consolidation
Review the percentage of share holdings is documented. ss c u a a h t s
a.
fe o f C rm f t a
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b. Obtain audited financial of each subsidiary or affiliate o
r not
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considered a component entity. For companies with
d
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re e
coterminous year ends, ensure:
tetime frames allowed© n ta his tra se. b
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ar framework. NLY cou . T on rpo ave .
The difference in periods is within the s
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Consider the financial impact
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Determine whether all components
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group financial statements.
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f. Design and perform further audit procedures on the
consolidation process to respond to the assessed risks of
n ts g
a i
nt yr pro ent
material misstatement of the group financial statements arising
from the consolidation process. Such procedures could include:
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
c co C o is um ent
is and oc um k
Consistency of accounting policies used.
l A t r
en ada ed d doc ma d
 Verifying the accuracy of the consolidation working papers
or calculations.
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 Elimination of inter-component profits or losses.
e o f C rm t a
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 Elimination of investment or related party accounts.
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 Reviewing purchase equation and foreign exchange
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adjustments.
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Reconciliation of non-controlling interest and equity
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accounts.
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 Evaluating the appropriateness,
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accuracy of consolidation
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reclassifications.©
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 CU ofe pur pro r an cum n vi
Identification of subsequent events.
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 Compliance with the requirements of
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financial reporting framework.
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M
Review of component
r t
auditor's
s s o u c
10. Business combinations SA Cha r illu ed o be on a eCsEoAV (Med)ium Business 3.00 6/1/2018
For business combinations, ensure thatfo the n s
measurement t t
and r u s combinations
e o a
disclosure recommendations of the appropriate
lic financial
is p pe for
n reporting
is d
framework are followed.
n o ta
a ln
l
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Modified
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E AV o
(Med)ium
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11. Investment disposal 3.00 7/31/2010
n ts g
Where the entity has lost control over or disposed of the investment,
a i
verify the gains/losses from disposal by:
u nt pyr pro ent
 Reviewing correspondence or minutes supporting the loss of
c co Co is um ent
control or disposal.
 Verifying the proceeds from the sale.
n a e n da d
d oc ar
o e d m ed
 Recalculating the gain or loss.
s si c um(Med)ium
a na ark he ter Significant
s
12. Significant transactions
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f t a en
w ictransactions 4.00 6/1/2018
Verify significant investment transactions during the periodro s D o e o s l
hi nts wat tion Thi en
by
P
examination of:
d T
a. Authorization for purchases and sales.
e re © nta his stra se. b e
t
b. ar to ensure
Where there has been a business combination
h
during the LY
N the cc
ou . T on rpo ave .
y h
, C and in accordance O withA nl dem r pu at only
period, review all supporting documentation that
1
accounting treatment was appropriate
S l o
02 framework.NT ona es e a the ts th ng
the appropriate financial reporting
2
13. Cut-off
© M E si os vid AV y o Low en ewi Cut-off 3.00 7/31/2010
U e s r p o n m i
Document:
C of pu o pr or a ocu an v
The entity's cut-off procedures. O r
a.
D P ion t f
b. Audit procedures performedE
L to ensured
re t
transactions
a werely
e e d a l d r th
P period.
recorded in the appropriate
M r te s tr sol
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14. Component entities and
S A ha ill
related parties u d b a s Component 2.00 7/31/2010
C balances e
r with componento entitieso n e
fo ens ot t ar r us
Document transactions and ending entities and
or other related parties. related parties
15. Collateral
c
li is n pp e fo C E AV Low Collateral 1.00
is d a
astcollateral.
n no of
Identify whether any investments have been pledged
Review legal agreements and minutes andamake inquiries
ll
wi
management.
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16. Translation 4.00 6/1/2018
n ts g
Ensure investments recorded in a foreign currency have been
ta i
translated at the appropriate period-end exchange rate.
u n pyr pro ent
17. Accounting policies
c co
AV Low
C o is um Accountinge nt 3.00 7/31/2010
is and oc um k
policies
Ensure the accounting policies are appropriate and consistently
l A t
applied.
na en ada ed d doc m ar
18. Presentation and disclosure
sio PD
um an ark he
Low
ed
er and disclosure
Presentation 2.00 4/1/2020
s c t at s
a. Classification
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e D o f C rm
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s w icen
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Ensure the classes of transactions have been appropriately
d
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re framework. © nta
classified, aggregated or disaggregated and characterized
e
in
is stra se. be
t
accordance with the applicable financial reporting
h
b. Disclosures
h ar N LY cou . T on rpo ave .
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The notes to the financial statements include disclosures O Ac nly em pu at h nly
21
required by the appropriate financial S
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framework. o a d er th g o
Relevant information 2
0 N e s e th s
E sio os id y o ent ewin
c.
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CU that ur or pro r an cum n vi
fise not relevant
The overall presentation of the financial statements has not
been undermined by including information
O o p
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that obscures a proper understanding Pr mattersio ndisclosed.to d fo l do tha
E e d t ly
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19. Entity appointed experts AV Low Entity 3.00 8/1/2020
M P t e s t appointed
Where the work of entity-appointed r
experts is
u
of
s
significance
e c o
financial statement area A ha r ill
S of theCaudit: e d ob n
a s
e
experts
a. Determine whether the firm has o
fthe necessary
e ns expertise
ot t to ar o r us
ic s n ppe fo
evaluate their work for audit purposes.
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fC b Date
AV Low o
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20. Evaluation of entity appointed expert work 3.00 8/1/2020
n ts g
Where the firm has insufficient expertise internally to evaluate the
a i
nt yr pro ent expert work
work of an entity-appointed expert for this financial statement area appointed
u p
o is um ent
(other than accounting estimates), then, for matters that are
potentially significant:
c co C
a. Identify and appoint in writing an appropriate expert to act on l A t is and oc um k
r
behalf of the firm.
b. Obtain an Expert's Independence and Expertise Declaration.si
s c um an ark he ter se
c. Complete the Worksheet - Use of Experts - Form 620. fe o f C rm f t a
w icen
Consider the findings of the firm's expert and, whererthey
o s D o e o s l
P hi nts wat tion Thi en
d.
d
diverge significantly from those of the entity, obtain
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explanation(s) for the divergence and evaluate rethe implications © nta is stra se. be
and the extent of related uncertainties. rte h
h a N LY cou . T on rpo ave .
SIGNIFICANT ACCOUNTING ESTIMATES
2 1 S
21. Approach
0 N
2 to the assessedErisks using e s e th s
Approach 2.00 4/1/2020
Develop an appropriate response
©are detailed below):
M s s io one oros
p v id y o ent ewin
CU ofe pur pro r an cum n vi
more of the following (which
a. Evaluating subsequent events
O Pr ion
b. Testing management accounting
E
Destimates
d y to d fo l do tha
e t l
c.
P L estimate
Developing an auditor's point
t e tra ole use tua ther
r or range
Evaluating subsequent events
SAM har illus d s be n ac s o
22. Actual outcomes C or
f n se t to r o useC E AV Low Actual 1.00 4/1/2020
c e n o e a r outcomes
li p fo
is d is t ap
a. Obtain evidence subsequent to the balance sheet date for
actual outcomes (amounts) of estimates.
an l no
l
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b. If different from the estimate measurement at the balance sheet
date, inquire about the reasons, consider the reasonableness of
n ts g
a i
nt yr pro ent
explanations and associated evidence and consider whether
further action is required.
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23. Changes in circumstances
c cCoE AV Low Co d is um Changes e nt in 1.00 4/1/2020
l A t is an oc cumcircumstances
k
ar
Inquire about any changes in circumstances and other relevant
a e n da d o
conditions since the measurement date may affect the accounting n m na rke e d erm ed d
estimate.
s io u
Testing management accounting estimates f es o c Ca
m
a f th
w at ens
f
24. Methods Pr
o
is DC E sAVo Lowater n o his n licMethods 1.00 4/1/2020
e
Evaluate whether the method used to prepare the accounting
r
d Th ant s w atio . T ee
estimate is:
rte Y
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a L o . o n p o a
Ch ON Acc nly em pur at h nly.
a. Appropriate in the context of the applicable financial reporting
framework.
,
1 methods have
b. Consistent with prior periods.2Where
0 N TSchanged,
n al es o a d her th g o
2 e t s
E sio os id C E yAVo Low ent ewin
evaluate whether the change is appropriate.
25. Management bias © M s p v Management 1.00 4/1/2020
U fe
C theomethod pindicateu r ro n m v i
O
Evaluate whether judgments made in selecting
r p or a cu an bias
possible management bias.
E
D
d
P ion
y to d f l do th
L e t l
ein use tuaAV heLow r
r raprepared
26. Mathematical accuracy Mathematical 1.00 4/1/2020
P t e
M statedar(step above) t
s and are o l t accuracy
Determine whether the accounting
A
estimates
lu
were
s e a c o
S Ch r il
accordance with the methods
ed to b on ses
mathematically accurate.
o s
27. Management's use of experts f
ic en not ear r u C E AV Low Management's 1.00 4/1/2020
l p fo
When management hires an expert to assist is atheir
is indpreparing p use of experts
t
an l nofothe
estimates:
a. Assess competency, expertise and objectivity
l
firm/individual.
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b. Review the engagement letter/contract to understand the scope
and any limitation of the expert's work.
n ts g
a i
c. Obtain the expert's report.
u nt pyr pro ent
 Review the reasonableness of the assumptions and
c co C o is um ent
methods
r
 Review the completeness and accuracy of the source data,
to ensure the calculations are applied in accordance with on
a en ada ed d doc ma d
the method and are mathematically accurate s si c um an ark he ter se
fe o f C rm f t a
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d. Evaluate the relevance and reasonableness of that expert's
ro s D o e o s l
findings or conclusions, and their consistency withP
d
other audit
re
evidence.
e © ntaC AV hisLow stra se. be
28. Complex modeling t
r complex modeling, Y ou T n o ve Complex 2.00 8/1/2020
Where management's chosen method involves h a N L c . o r p ha y. modeling
C O A c ly m u
1, n e rp at onl
determine whether:
 Judgments have been applied2 and TS al o d e t h
20 the measurement
consistently;
E N objectiveo nof theses e a th ts in g
i d o n
vi ny me
 The design of the model meets
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applicable financial reporting framework;U M ss rpo ew
and
fe
C o are appropriate ro v i
 Whether adjustments to the output O r
of the model pu o p or a ocu an
D P n t f
LE
re d
and consistent with the measurement objective of the
a tio applicable
ely e d a l d r th
P te tr sol us ctu C EoAVtheLow
financial reporting framework.
Significant assumptions M r u s e
29.
S A ha ill d b a s Significant 1.00 4/1/2020
C assumptions e individually
rfor determining o or n e assumptions
Determine whether management's
o s
(either
t o s
as a whole) provide a reasonable basis f n t
accounting
ar u
estimates. il ce s no ppe for
is context iof the applicable
ta
a. Are assumptions appropriate in the
financial reporting framework? n d o
a l nappropriate?
l
wi
b. Are changes in assumptions from prior periods
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Modified
fC b Date
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c. Do the judgments made in selecting the significant assumptions
give rise to possible management bias?
n ts g
a i
d. Are the significant assumptions consistent with:
u nt p yr pro ent
 Each other?
c co C o is um ent
 Those used in other accounting estimates?
r
 Related assumptions used in other areas?
e. Where estimates require management action, does
management intend (and have the ability) to carry out thees
si c um an ark he ter se
o f C rm t a
w icen
specific courses of action?
rof D o e o f
s
f. Has the integrity of the significant assumptions been
d
P
T h is ts
n w at tion Thi en l
maintained in applying the method?
e re © ntaC E AVhisLow stra se. be
30. Data rt Y ou T on o ave Data 2.00 8/1/2020
h a L . p
Obtain sufficient evidence to support management's selectionNand
, C O Acc nly em pur at h nly.
21 TS nal
application of data used in determining the accounting estimate.
s o a d er th g o
Address the following:
0 N e h s
Is the data appropriate in2the context of the E e t
a.
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r
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management, including contractual requirements?
l
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__________________________
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f. Has the integrity of the data been maintained in applying the
method?
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31. Estimation uncertainty
u n pyr pro ent Estimation 2.00 8/1/2020
o o s nt
uncertainty
Evaluate whether management has taken appropriate steps to
c c C i um e
is and oc um k
understand estimation uncertainty in accordance with the appropriate
financial reporting framework. l A t r
To understand how management prepares a point estimate, refer to n
o
Form 523.
ssi c um an ark he ter se
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32. Estimation uncertainty not understood
rof D o f C erm of s w licEstimation 2.00 8/1/2020
P h is ts a t o n hi n
uncertainty not
d i
an is w trat e. T bee
understood
resteps to T
a. When management has not taken appropriate
te © n t h
management to: h ar request NLY cou . T ons rpos ave .
understand or address estimation uncertainty,
O Ac nly em pu at h nly
, Cto be able to understand
 Perform additional procedures
estimation uncertainty 02
1 S
2 of the point estimate N e s e th s
©
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L the following: ra ole use tua ther
b. If management's response does not sufficiently
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rt
M pointaestimate s s c
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 Evaluate whether a significant
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o controlendeficiency
o
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33. Use of auditor's experts
lic s n ppe for C E AV Low Use of auditor's 1.00 8/1/2020
is d
When the auditor needs an expert to assist in the i testing a experts
t
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management accounting estimate:
l
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__________________________
ada he Name
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fC b Date
o e d ed
ht vid
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n ts g
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c co C
is and oc um k
l A t r
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s s c um an ark he ter se
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e o f C rm t a
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the method and are mathematically accurate
r of D o e o f
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Evaluate the relevance and reasonableness of thatPexpert's is t n i
d other audit Th ants wa atio . Th een
d.
findings or conclusions, and their consistencyewith
r © nt s
evidence.
rte Y u T hi nstr ose ve b
Developing a point estimate or range ha L co . o p a
, C O Ac nlyE emLow pur at h nly.
N
34. Point estimates
2 1 T S al o d e r t h o Point estimates 1.00 4/1/2020
20 about
Develop a point estimate to evaluate management'sNaccounting
E o n This ses e a th ts in g
i d o n
© M ss rpo vi ny me
estimates and related disclosures estimation uncertainty.
includes: U fe ro v iew
a. OC Prfinancial
Evaluate whether the methods, assumptions
appropriate in the context of theDapplicable n
pu areo p or a ocu an
oor data used
o ly t f
l d r th
reporting
L E e d ti e d a
framework.
r a e
35. Range estimates M P te
r str sol
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A a illu daccountingb a
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S to evaluate s estimates
Develop a range estimate management's
r s euncertainty.
o on e
estimates and related disclosures
fo en ot t ar r us
estimation This
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n d ot a
Evaluate that the range is reasonableain the context
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l n of the
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__________________________
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c. Evaluate the disclosures in the financial statements that
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n ts g
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36. Use of auditor's experts E
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t
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When the auditor needs an expert to assist in the development of the experts
point estimate or range: c s
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a lA n t i a an do cum ark
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m nad rked e d erm ed
firm/individual.
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o
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red and Th ant s w atio . T ee
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rte Y
©
a L o n o
 Review the completeness and accuracy
, C h of the sourceNdata, cc
O with A ly. emo urp t ha ly.
on a d er p tha on
to ensure the calculations are applied in accordance
21
the method and are mathematically
0 accurateTS a l s g
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2 reasonablenessEofNthat expert's
s ion ose ide o th nts in
M
findings or conclusions, and their consistency withsother audit p v y e e w
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37. Testing management accounting estimatesD Pr ion to fo C EdAVo Lowtha Testing 1.00 8/1/2020
LE e d a t l y ed a l r management
When developing an auditor's point
P r
estimate or range,
r e
further
l audit
s u e
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procedures located in testing managementte accounting
s t estimates
s o eu c t
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SA Cha r ill
shall be designed and performed. u d b a s estimates
e o on e
PRESENTATION fo ens ot t ar r us
38. All estimates disclosed lic s n ppe fo C Low All estimates 1.00 4/1/2020
i
is (identified a disclosed
Ensure there are no other events/conditions
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an lthat
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li n statements.
recognised (including note disclosures) in the financial
w
__________________________
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Modified
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PD Low o
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39. Applicable financial reporting framework 2.00 8/1/2020
n ts g
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reporting
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a. The estimate disclosures are reasonable, in all material
c co C o is um ent
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r
framework. Refer to the financial reporting framework forms for
i um an ark he
additional guidance.
The financial statement appropriately disclose estimation ss c t ter se
b.
e o f C rm a
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uncertainty.
rof s D o e o f
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AUDIT PLAN COMPLETION
d
P
1) An appropriate level of professional skepticism was
e reused in © nta his stra se. b e Professional 1.00 4/30/2015
rt Y u T n o av e
evaluating audit evidence obtained.
h a L o . o p
skepticism
2) Evaluate whether any of management'sC
,
either individually or as a whole, are1indicators
ON Acc nly em pur at h nly.
judgments or decisions Evaluate 1.00 4/1/2020
2 T S al
of possible
o a d er t h go management
management bias.
2 0 N ion se s e th s n
judgment for
© E s o id y o en ew t i any possible
U M s r p v i bias
fe
3) Misstatements identified (other than thoseCdeemedotrivial) have ro n m v
pu been p or a cu an
DO Pr on
Misstatements 1.00 7/31/2010
o f o
d atofi existingly t ed al d r th
recorded on Form 335. identified
4) New risk factors identified (and L E assessments
e
P revised
e ras on the
t e us
r Risk Report
l tu h e New risks 1.10 4/30/2014
risks) were documented, assessed t
M arthrough uthes procedures
(such
s o e c o t identified
520E, or equivalent) andA
S Ch r il
addressed l d ob a s documented,
e on e
fo ens ot t ar r us
performed above. assessed and
addressed
ic n e o
AUDIT CONCLUSIONS (based on professional
i s l d is judgment) a pp f
t the risk of material misstatement to an acceptably low level.
an l no
The audit evidence obtained is sufficient and appropriate to reduce
Completed by: l
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__________________________
a da he
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Reviewed by:
o fC d
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rof s D o e of
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d
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2 0 N e s e th s
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Long Terminvestments Auditprocedures

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