64. REVISION OF FINANCIAL INVESTMENTS. CONTROL OF COMPLIANCE WITH THE LEGISLATION. CONTROL OF FINANCIAL REPORTING

Compliance in this area may consist in checking:

1) antimonopoly legislation when making transactions with shares;

2) joint-stock legislation when making transactions with shares;

3) legislation on the securities market when performing operations with shares;

4) correctness of taxation of transactions with financial investments, etc.

Verification that all transactions reflected in the accounting actually took place. Some investments may formally meet the criteria for recognition in accounting, but essentially their value is zero, i.e., as a result of their acquisition, the organization actually suffered losses.

Such "fictitious" financial investments include:

1) acquisition by an organization of debt securities unsecured by collateral; if the issuing organization does not have any assets at the expense of which it is possible to cover the amount of the debt;

2) acquisition of shares of unprofitable companies, companies with a negative value of net assets that have a negative dynamics of changes in financial condition.

Another way of fictitious attachments is to provide fake documents.

Verifying that all transactions that actually took place are recorded. In the early 90s. XX century acquisitions of shares and interests in other organizations were often written off against the net profit of the acquiring organization, and sometimes were taken into account as its operating expenses. This was explained primarily by the novelty of this operation for accountants and the lack of a clear regulatory framework for accounting for such investments. As a result, the balance sheet does not contain information about the shares and shares actually owned by the organization, as well as contributions to jointly established enterprises.

Identifying such investments is extremely difficult. It is effective to view the preserved business correspondence of that period, decisions of the board of directors, contracts, conversations with employees who held responsible positions in those periods. An analysis of the dividends received over the past three to four years can help.

Checking that the value of financial investments is reflected correctly in the balance sheet. Accounting rules require publicly traded stocks and bonds to be reported at market value. The auditor can request from the organization data on quotes of existing financial investments and selectively check the correctness of their reflection in accounting.

Impairment of financial investments is recognized as a steady significant decline in the value of financial investments, for which their current market value is not determined, below the amount of economic benefits that the organization expects to receive from these financial investments in the normal course of its activities. In this case, based on the calculation of the organization, the estimated value of financial investments is determined, which is equal to the difference between their value at which they are reflected in accounting (book value) and the amount of such a decrease.

<< Back: Audit of financial investments. Assessment of the internal control system

>> Forward: Audit of financial investments. Efficiency control

We recommend interesting articles Section Lecture notes, cheat sheets:

▪ Constitutional law of the Russian Federation. Lecture notes

▪ Labor protection and safety. Crib

▪ Children's surgery. Lecture notes

See other articles Section Lecture notes, cheat sheets.

Read and write useful comments on this article.

<< Back

Latest news of science and technology, new electronics:

The existence of an entropy rule for quantum entanglement has been proven 09.05.2024

Quantum mechanics continues to amaze us with its mysterious phenomena and unexpected discoveries. Recently, Bartosz Regula from the RIKEN Center for Quantum Computing and Ludovico Lamy from the University of Amsterdam presented a new discovery that concerns quantum entanglement and its relation to entropy. Quantum entanglement plays an important role in modern quantum information science and technology. However, the complexity of its structure makes understanding and managing it challenging. Regulus and Lamy's discovery shows that quantum entanglement follows an entropy rule similar to that for classical systems. This discovery opens new perspectives in the field of quantum information science and technology, deepening our understanding of quantum entanglement and its connection to thermodynamics. The results of the study indicate the possibility of reversibility of entanglement transformations, which could greatly simplify their use in various quantum technologies. Opening a new rule ... >>

Mini air conditioner Sony Reon Pocket 5 09.05.2024

Summer is a time for relaxation and travel, but often the heat can turn this time into an unbearable torment. Meet a new product from Sony - the Reon Pocket 5 mini-air conditioner, which promises to make summer more comfortable for its users. Sony has introduced a unique device - the Reon Pocket 5 mini-conditioner, which provides body cooling on hot days. With it, users can enjoy coolness anytime, anywhere by simply wearing it around their neck. This mini air conditioner is equipped with automatic adjustment of operating modes, as well as temperature and humidity sensors. Thanks to innovative technologies, Reon Pocket 5 adjusts its operation depending on the user's activity and environmental conditions. Users can easily adjust the temperature using a dedicated mobile app connected via Bluetooth. Additionally, specially designed T-shirts and shorts are available for convenience, to which a mini air conditioner can be attached. The device can oh ... >>

Energy from space for Starship 08.05.2024

Producing solar energy in space is becoming more feasible with the advent of new technologies and the development of space programs. The head of the startup Virtus Solis shared his vision of using SpaceX's Starship to create orbital power plants capable of powering the Earth. Startup Virtus Solis has unveiled an ambitious project to create orbital power plants using SpaceX's Starship. This idea could significantly change the field of solar energy production, making it more accessible and cheaper. The core of the startup's plan is to reduce the cost of launching satellites into space using Starship. This technological breakthrough is expected to make solar energy production in space more competitive with traditional energy sources. Virtual Solis plans to build large photovoltaic panels in orbit, using Starship to deliver the necessary equipment. However, one of the key challenges ... >>

Random news from the Archive Digital voice recorder with laser beam 02.07.2001 The easy-to-use digital audio recorder is ideal for recording 138 minutes of normal mode interviews and 69 minutes of fast mode interviews. The recorder is equipped with a laser beam pointing at the sound source, a built-in microphone and a loudspeaker. With a memory of 8 megabytes, it stores up to 99 messages with their serial numbers on the LCD screen. Operated by buttons "on", fast "rewind" forward and backward. There is an automatic shutdown mode. Erasing the record is done by pressing one button. Can be connected to an external speaker, computer, cassette deck with standard input jacks. Dimensions: length - 15 cm, diameter - 2 cm.

Other interesting news:

▪ Container ship on methanol

▪ OLED lighting

▪ New 802.15.4e/g wireless protocol stack for CC1310

▪ Magnetic spray creates robots

▪ USB 3.1 up to 10 Gbps

News feed of science and technology, new electronics

Interesting materials of the Free Technical Library:

▪ section of the site Children's scientific laboratory. Article selection

▪ article Collapsible house-hozblok. Tips for the home master

▪ article What's Hidden in the FedEx Logo? Detailed answer

▪ article Electric welder. Standard instruction on labor protection

▪ Article Law for treasure hunters. Encyclopedia of radio electronics and electrical engineering

▪ article Again about the completion of tape recorders. Encyclopedia of radio electronics and electrical engineering

Leave your comment on this article:

All languages ​​of this page

Arabic	Hebrew	Polish
Bengali	Hindi	Portuguese
Chinese	Italian	Spanish
English	Japanese	Turkish
French	Korean	Ukrainian
German	Malay	Vietnamese

Home page | Library | Articles | Website map | Site Reviews

www.diagram.com.ua
2000-2024