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All marketable securities on the balance sheet are held by the entity or
by custodians for the entity. All recorded income from marketable
securities has accrued to the entity at the balance sheet date (Existence
assertion);
All marketable securities owned by the entity at the balance sheet date
are included on the balance sheet. All income accruing from marketable
securities at the balance sheet date has been recorded (Completeness
assertion);
Marketable securities are included on the balance sheet at the
appropriate amount, in accordance with the financial reporting
framework under which the financial statements are being prepared.
(Some financial reporting frameworks require that such securities be
accounted for at their market value and other financial reporting
frameworks require that such securities be accounted for at the lower of
cost and market value.) Investment income is stated on the income
statement at the appropriate amount (Valuation assertion);
The entity owns, or has a legal right to, the marketable securities
included on the balance sheet. All marketable securities are free of liens,
pledges, or other security interests or, if not, such liens, pledges, or
other security interests are identified (Rights and Obligations assertion);
Marketable securities and the related investment income accounts are
properly classified, described, and disclosed in the financial statements,
including notes, in accordance with the applicable financial reporting
framework (Presentation and Disclosure assertion).
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Tracing information obtained during the security count to the final listing
of marketable securities and investigating any significant differences;
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Disposed of securities;
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For publicly traded marketable securities held by the entity at year end, we:
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To test that marketable securities are carried in accordance with the entitys
accounting policies or the applicable financial reporting framework, we:
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are reasonable and consistent with the prior year and applicable financial
reporting framework, and the impact of any new accounting standards
on the entity's accounting policy;
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5 Documentation
Documentation includes, but is not limited to, identification of the following:
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Confirmation replies;
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Inspect brokers advices and other support to verify that additions and
disposals have been recorded properly.
Verify interest and dividend income by calculating interest earned and
referring to published records of dividends paid.
Review the marketable securities and related accounts (e.g., interest and
dividend income) in the general ledger for unusual items.
Determine if marketable securities are properly classified in the balance
sheet.
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Possible Error
Procedure
Other
Substantive
Procedure
D1
1,2
D1
1,2,3,4
D1, D3, D4
1,2
D1
1,2
D1
D1
1,2,3,4
D1
D1
Possible Error
Procedure
Procedure
D1
D1
1,3,4
D1, D3, D4 1
D1
D1
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1,3,4
D1
D1
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