I CAPITAL / Equity

Done/ No/

paper ref.
Not appl.
Working
Task description

1. Obtain capital account analysis and reconcile totals (A)

Obtain an analysis of capital account balances segregated by class of stock, including balances at the beginning of the year,
additions, deductions and balances at the end of the period and trace the total against capital as per trial balance. Trace
opening to the previous year working papers. Test the mathematical accuracy of the analysis. Ensure there is no difference
between breakdown and capital and reserve account balance as per trial balance.
2. Agree share capital to articles of incorporation (A, E)
Trace all the items from the list obtained above against supporting documents (Company Set-up Statement, subsequent
increases in share capital). Investigate all the differences, if any.
Check the amount of share capital from trial balance by multiplying the number of shares with their nominal value as appear in
company incorporation documents (statutes). Take in calculation every additional increase in capital during the audit period.
Use also prior year working papers.
Check the cash increase in share capital against bank statements, if applicable.
3. Review reserve balances (A, E, V)
Obtain an analysis of reserve balances and (a) trace account balances to the trial balance and the previous year working papers; (b)
determine the nature of changes in the reserve balances from the prior year to the current year and examine, to an extent based on
materiality and inherent risk, supporting documentation; and (c) assess the adequacy of the year-end reserve balances.
4. Verify correctness of information for disclosure of capital items (PD)
Determine whether appropriate information for capital related accounts has been obtained for required disclosure in the financial
statements. Obtain the most recent version of articles of incorporation (statutes) and a recent certificate from the Trade Registry
(issued around the year-end). Check that information regarding shareholders and % of ownership is correctly presented in the
financial statements.

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A = accuracy / C= completeness / E = existence / V= valuation/ CO = cut off / PD = presentation & disclosure / RO = rights & obligations