Substantive Tests of Transactions and Balances 776

evidence is not available or for which examination of detailed evidence

Will detect misstatements.

Jn planning substantive tests, auditors consider materiality; audit risk and its
components; assertions.the nature, timing, and extent of procedures to test
fJ nancial statement

In this Chapter, a summary of the audit procedures used for substantive test
of transactions tied in to the financial statement assertion and the
A. Existence /
B. Occurrence
Recorded sales are Sales for which shipment For a sample of entriesin
for shipments of goods was not made the sales journal,
actually made to and therefore did not compare sales
invoice
austomers. occur may be recordêd. copy, customer
order, and sales
C. Completeness invoice.
All sales Goods may be shipped For a sample of shipptng
transactions that but not billed and documents, trace
sales
occurred are therefore not recorded. invoice and entry
recorded. into sales journal
and
accounts receivable
subsidiary ledger.
D. Rights and Perform cutoff
tests.
obligations
Sales recorded From a sample ot
Goods shipped on sales
represent only consignment may be invoices. examine
the
sales transactions. recorded as sales. tustomer order and
777 Chapter 20

misstatements ofthat assertion are presented. potential

This is followed by an audit program consisting of substantive audit

to tests details of balances of accounts affected by the transaction cycles
and finally the analytical procedures that may be applied to these
transactions and

I. Sales Transactions
A. Substantive Tests of Transactions
Potential Substantive Audit Asseräons
Misstatements Procedures

shipping document to determine

whether the transaction should have
been recorded as a consignment
transaction rather than as a sale.
E. Valuation / presentation and in accordætce with
PFRS.
F. Measurement
Sales are correctly
billed and recorded.

Sales and accounts For sample of entries in

receivable may be the sales journal, (a)
misvalued. examine sales invoice,
shipping document, and
customer order for
consistency of
descriptions and
G. Presentation and quantities; (b) examine
disclosure sales orders for
credit approval:
Sales and accounts and (c).check
receivable are prices and
recorded to result in extensions.
Foot sates
journal and
general ledger
 Substantive Tests of Transactions and Balances 778
a Accounts receivable are owned by the
c client.
c
o
u
n
t
E. Valuation /
F. Measurement
Accounts.receivable are property
Revenues may not be valued.
For a sample of entries In
properly classified.
the sales journal, verify
theaccuracy of account
C. Completeness G. Presentation and disclosure
Sales Sales and accounts receivable are

B. Substantive Tests of Details of Balances

A. Existence /
B. Occurrence
Sales and accounts I . Confirm accounts receivable and perform receivable
are for alternative procedures for confirmations

sh:pment: made to not returned.

customers. 2. Perform analytical procedures to test
sales and accounts receivable.
transac properly presented and disclosed in
tions accordance with PFRS.
that
occurr
ed and C. Analytical Procedures
existin
g Misstatements
accoun
ts
receiva Overstatement or understatement of
ble are sales
record 3. Perform a test of sales cutoff.
ed.
D. Rights and
obligations
779 Chapter 20
4.Review minutes of the aging schedule and trace it to the accounts
board of directors' receivable subsidiary ledger.
meetings, inquire of 6. Test the adequacy of the allowance for
client personnel, read uncollectible accounts.
contracts and
agreements, and confirm
with lenders any
indications that 7. Review the financial statements and perform
accounts have been analytical procedures to determine whether
assigned, sold, or accounts are classified and disclosed in accordance
pledged. with PFRS.

5. Verify the Analytical Procedures

mathematical
accuracy of the
accounts receivable 1. Compare the sales amount and gross profit
percentage for product lines by month and with
those of previous years.
2. Compare.the gross profit with industry
Overstatement or uncollectible
3. understatement accounts
of sales returns and
allowances data.
Compare sales returns and allowances
Overstatement or as a percentage of gross sales with
4. previous years' percentages.
understatement of
allowance for Compare the accounts receivable
turnover with the rate for previous years
and with industry data.

5. Compare uncollectible accounts

expense as a percentage of sales with
the rate for previous years and with
industry data.
6. Compare the allowance accounts as a
percentage of accounts receivable
with the percentage for previous
years and with industry data.

7. Compute the percentage of accounts

receivable by age category and
compare with previous years' data.
C. Compare written-off accounts that
were outstanding at the end of the
 Substantive Tests of Transactions and Balances 780
previous year with the allowance for
uncollectible accounts to evaluate the
adequacy of the previous allowance.
validated deposit ticket.

C. Completeness /
D. Rights and
obligations For a sample of days,
Ali receipts ot cash Cash mav be verify that all cash
misaopropriated.
anc checks are receipts are recorded ty
reconciling daily
listing(s)
recotcied. of cash receipts and
validated deposit ticket to
cash receipts journal.
9. Compare individual customer
balances Errors in individual customers' with balances of the previous year.
accounts receivable

ll. Cash Receipts Transactions

A. substantiy_g-Tests-9-f-Uransa-çuo-ns
Substantive Audit
Potential
Misstatements Procedures

Assertions

A. , Existence /
B. Occurrence
For a sample of entries T,
Recorded trace to the prelisting of
collections of cash cash receipts and to
from customers. remittance advice. Fot a
sample of entries,
reconcile dally deposit to
actualreceipts Fictitious may be recorded.cash receipts cash receipts jourr,a'.
represent
E. Valuation /
781 Chapter 20
F. Measurement A customer may be given For a sample of entries n

the receipts journal Debits to cash and credit for an amount cash receipts journal
recorded to result credits to accounts bigger than actual examine remittance
in presentation receivable are payment. advice and verify that
and disclosure in valued at amounts discount taken was
accordance with received. appropriate. Foot
PFRS. accounts receivable
subsidiary ledger
B. Substantive Tests of and reconcile to the
general ledger
Details of Balances account.
Substantive Audit
Procedures G. Presentation and
disclosure
Cash receipts Entries may be made to Review account coding
a
transactions are wrong accounts. for sample of entries
in cash
Assertions

A. Existence /
B. Occurrence
Cash recorded on the Count cash on hand.
cash. I.
books exists. 2. Confirm bank balances.
3. Examine interbank transfers for the
last five days of the current period
and the first five days of the new
period.
4. Perform analytical procedures.
C. Completeness
All of the entity's cash is 5. Perform cash cutoff test.
included. 6. Prepare a proof of cash.
D. Rights and obligations
Any restrictions on cash 7. Examine standard bank confirmations

have been identified. and read the hinutes of the board

of directors' meetings to
determine any restrictions have
been placed on
E. Valuation /
F. Measurement
Cash is correctly valued. 8. Obtain bank cutoff statements directly
from the bank and use them to test the
bank reconciliation as of statement of
financial position date.
 Substantive Tests of Transactions and Balances 782
G. Presentation and
disclosure
Cash is presented and 9. Review the financial statements
and
disclosed properly. perform analytical procedures to
determine whether accounts are
classified and disclosed in
accordance with PFRS.

c. AnalEigal-.?-r-ogg-uzes

Analytical procedures are not used extensively in auditing cash: Auditors

compare actual cash balances to budgeted cash balances to identify
variations • that merit investigation. A reasonable relationship between the
budgeted cash balance and the recorded cash balance provides evidence
about the existence of cash. Comparing monthly cash balances during the
period with those of the previous period also may identify variations that
should be investigated.

Ill. Purchases Transactions

A. Substantive Tests of TransaCtions
Potential Procedures
Assertions Misstatements

A. Existence /
B. Occurrence Examine underlying
Recorded Purchases that did not documents for
purchases are for occur may be recorded. authenticity and
items that were Documents may be reasonableness Scan
acquired. reused, and acquisitions voucher register for large
may be recorded twice. or unusual items. Inspect
acquired property, plant,
and equipment. Trace
inventory purchased to
perpetual records.
voucher register fot
duplicate payments

Substantive Audit
occurred are recorded.
-C. Completeness Purchases may
be
Purchases that unrecorded.
783 Chapter 20
D. Rights and sequence of entries in the
obligations voucher register.

Purchases are the Purchases

may be for a entity's
acquisitions legitimate Trace from invoices to
business perpetual inventory
records. Examine
vendor's invoices to
determine that
Valuation / goods were
F. Measurement purchased.
Ciient could overpay
for
Purchases are
recorded for the proper goods or services.Recompute
amounts. invoices and
purpose. Goodscompare
and liabilities. received invoice price
on to purchase
consignment
order. be
may
recorded as purchases.
G. Presentation and
disclosure
Check accuracy of accounts
Purchases are Purchases onmay
invoices by reference to
be chart of accounts.
recorded to result in charged to
wrong
presentation and accounts.

disclosure in accordance with

PFRS.
Trace a sequence of receûving reports to entries in
the voucher register. Test cutoff Account for a
Substantive Tests of Transactions and Balances 784
785 Chapter 20
B. Substantive Tests of Dgtails of Balances

Assertions Substantive Audit Procedures

A. Completeness
All 3.
purch
ases 4.
and
accou
1 Test cutoff to determine whether purchases and
nts . accounts payable are recorded propeny.
payab Reconcile accounts payable to vendors'
le statements and consider the need for
transa 2 confirmation with vendors. Apply analytical
ctions procedures to test purchases and accounts
. payable. Perform a search for unrecorded
are
recor liabilities.
ded.

B. Valuation
Transactions are recorded 5. Verify the mathematical accuracy of
the
at their proper amounts. vouchers payable listing and trace the
balance to the general ledger.

C. Presentation and disclosure

Accounts payable are 6. Determine whether accounts are

properly classified and classified and disclosed in the
finandia:
disclosed. statements in accordance with PFRS.

Analytical procedures also provide euidence about the ccmpieteness

accounts purchases payable and accounts and expense payable. account Auditors
balances compare with previous-year current-year balances,individual
and they compare the ratios of the purchases to accounts payable and the ratios of
accoúnts payable to current liabilities with previous-year ratios.
 Substantive Tests of Transactions and Balances 786
IV. Cash Payments Transactions
A. Substantive Tests of Transactions
Potential Substantive Audit
Misst
atements Procedures

A. Existence /
B. Occurrence
787 Chapter 20

made were the may be made.

entity's obligations.
E. V F. Measurement
al Debits to various accounts
u and credits to cash are
at valued at proper amounts.
io
n G. Presentation and
disclosure
/
Improper amounts may Recalculate invoices be paid
because of math paid. errors or incorrect discounts.
 Substantive Tests of Transactions and Balances 788
Cash payments Payments may be Check accuracy of transactions are
credited to wrong accounts on invoices by recorded to result in
accounts. reference to chart of presentation and accounts.

disclosure in accordance with PFRS.

789 Chapter 20
 Substantive Tests of Transactions and Balances 790
V. Payroll Transactions
A. Substantive Tests of Transactions

Potential

A. Existence/
B. Occurrence

transactionsoccurred.Recorded payroll fictitious Payroll may or

formerinclude the For employees.

time payroll signature

on to payee's signature C. Completeness distribute
All payroll earned by employees is Paychecks may be Test or
recorded. issued but not recorded. reconciliation

register statement.
791 Chapter 20
andBa1ances

D. Rights and
obligations
Payroll transactions Employees may be Examine the supervisor's
AnalyticalProcedures paid
signature on time cards
work.
E. Valuation /
F. Measurement
Fictitious exist or Reviewthe payroll
Payroll transactions Employees may be
are recorded for the overpaid or underpaid. Recalculate payro'J and

proper amounts. reconcile hours time

cards to total hours for
wt»ch employees are
paid. ÅJso
comparetota' payrol to
the check Mitten to
transfercash to
the payroll account
G. Presentation and
disclosure
Cash payment
transactions Wages expense may be Check
are charged to wrong accuracy o'
accounts. accounts ootime cards
recorded to result in

presentation and by reference to chart

disclosure in accounts and review
accordance with financial
PFRS. for propriety ofemployee

share options arxl other fringe benefits. B.

employees may register, general ledger, significant overpayments

may be and payroll earnings records for entries that
made to employees. appear unusual, such as very large
paychecks or employees not assigned
to departments.
Payroll expense may be Compare average pay per employee for the
overstated or understated. current year to average pay for prior year
 Substantive Tests of Transactions and Balances 792
(taking into consideration pay raises).
Payroll expense may be Compare direct labor as a percentage of
cost
overstated or understated. of sales Wilh the previous years percentage.

Commission expense may be Compare the ratio of commissions expense

overstated or understated. to sales with the previous years ratio.

Fictitious employees may exist on worked Compare reports and with the
budgets.those number indicated of hours on employeesproduction hours
may be overstated.

Compare payroll tax expense as a

Payroll tax expense may be percentage of cost of salaries and wages
overstated or understated. With the percentage for previous years.
Ví. Production Transactions

Potential Substantive Audit

Procedures

A. Existence/
793 Chapter 20
C. Completeness / D. approved labor
Rights and obligations tickets, and
allocation of
overhead.
tickets,
authorized
labor
rates, and
standard
overhead
rates.
Review
variances.

Presentation and
G. disclosure
Balanes 781
Costs may be assigned Check accuracy of
production to wrong accounts.
transactions are account coding by recorded to
result in reference to chart of presentation and
accounts.
disclosure in
accordance
with pFRS.

B. Anal ical Procedures

Auditors' substantive tests of balances relating to production
are primarily analytical procedures and variance analyses.
Appropriate analytical procedures include comparing actual
costs per unit produced to (a) budgeted costs, (b) prior years
costs, and (c) standard costs. Auditors can compare the
relationship between actual costs of material, labor, and
overhead for production in the current period to those for
production for a previous period; significant variations should
raise questions about whether costs are misclassified.
Manufacturing reports, such as performance reports, variance
analyses, and other reports used for internal management,
should be reconciled to the amounts recorded in the
accounting records for production.
 Substantive Tests of Transactions and Balances 794
VII. Inventory Warehousing Transactions

A. Existence /
B. Occurrence

Receipts or issues of For selected transactions

recorddd in the
Recorded inventory inventory
warehousing inventory that did not occur control account,
may be recorded. examine
transactions
signed feceiving repoft.
occurred. C.
Completeness
Goods may have been Account for a sequence
All inventory of receiving reports and
warehousing received or issued but requisiftons. Perform
transactions that not recorded. records&floor and
floor-
occurred are to-records tests.
recorded.
795 Chapter 20

inventory 1 . Before the

client takes the physical
inventory, review and
approve the clients
2. 3.
 Substantive Tests of Transactions and Balances 796
C. Completeness

All inventory of
the entity is
recorded.
4.

5.
written plan for taking it. Observe the
client personnel physically counting
inventory. Confirm inventorieS on
consi5nment and

held in public warehouses.

Obtain a copy of prenumbered inventory

tags used by the client in taking
invent01Y and reconcile the tags to the
listing. For selected items, trace from tags
to listing.
Chåpter 20
Balan
ces

disclos
financi
the boa
E. Valuation /
F. Measurement
Recorded inventory 9. Consid
is valued in Cr inv
accordance with for inv
PFRS. year's
10. For
replac
apply

I l. Verify
12 Revie
. inven
a. b
i
s
b. s
s
G. Presentation and t

dlsclosure 13
. Dèter
Inventory is class
finan
classified and statem
disclosed in
accordance with
 6. Perform cutoff procedures. Obtain the
receiving report number for the last
shipment received prior to year-end and
determine that the item is included in
inventory. Also, identify the last shipping
Substantive Tests of document and determine, based on
Transactions
shipping terms, when the item was
and 798recorded in sales or inventory.
properly

7. Perform analytical procedures.

D. Rights and
obligations
Inventory is owned 8. Determine that consigned inventory has
by the entity. been excluded from inventory and that
inventory pledged has been appropriately
PF
R
S.
invent
ory
freque
ntly
includ
e
compa
ring
gross
profit,
invent
ory, or
turnov
er to
data
for the
entity
for
previo
us
period
s, to
industr
y data
budget
ed
data,
and
scanni
ng the
invent
ory.
These
compa
risons,
which
Chåpter 20
can be
done
for
segme
nts of
the
entity
as
well
as for
the
whole
entity,
are as
follow
s:
1. G
r
o
s
s
p
r
o
f
i
t
.
C
o
m
p
a
r
e
g
r
o
s
s
p
r
o
f
i
Substantive Tests of Transactions
and 800
t
t
o
h
i
s
t
o
r
i
c
a
l
r
e
s
u
l
t
s
a
n
d
t
o
r
e
s
u
l
t
s
o
f
o
t
h
e
r

e
Chåpter 20
n
t
i
t
i
e
s
i
n
t
h
e
i
n
d
u
s
t
r
y
U
n
e
x
p
l
a
i
n
e
d
'
d
e
c
r
e
a
s
e
s
.
m
Substantive Tests of Transactions
and 802
i
g
h
t
s
u
g
g
e
s
t
o
m
i
s
s
i
o
n
o
r
u
n
d
e
r
v
a
l
u
a
t
i
o
n
o
f
i
n
v
e
Chåpter 20
n
t
o
r
y
.
I
n
c
r
e
a
s
e
s
m
i
g
h
t
s
u
g
g
e
s
t
o
v
e
r
v
a
l
u
a
t
i
o
n
o
f
i
Substantive Tests of Transactions
and 804
n
v
e
n
t
o
r
y
.
2. I
n
v
e
n
t
o
r
y
o
f
p
r
i
o
r
p
e
r
i
o
d
o
r
b
u
d
g
e
t
e
d
Chåpter 20
i
n
v
e
n
t
o
r
y
.
C
o
m
p
a
r
e
i
n
v
e
n
t
o
r
y
t
o
i
n
v
e
n
t
o
r
y
f
o
r
t
h
e
Substantive Tests of Transactions
and 806
p
r
i
o
r
p
e
r
i
o
d
o
r
t
o
b
u
d
g
e
t
e
d
i
n
v
e
n
t
o
r
y
.
U
n
e
x
p
l
a
i
Chåpter 20
n
e
d
d
e
c
r
e
a
s
e
s
m
a
y
s
u
g
g
e
s
t
o
m
i
s
s
i
o
n
o
r
u
n
d
e
r
v
a
l
u
a
t
Substantive Tests of Transactions
and 808
i
o
n
o
f
i
n
v
e
n
t
o
r
y
;
u
n
e
x
p
l
a
i
n
e
d
i
n
c
r
e
a
s
e
s
m
a
y
s
u
g
Chåpter 20
g
e
s
t
o
v
e
r
v
a
l
u
a
t
i
o
n
o
f
i
n
v
e
n
t
o
r
y
.

3. I
n
v
e
n
t
o
r
y
t
u
r
n
o
v
Substantive Tests of Transactions
and 810
e
r
.
C
o
m
p
a
r
e
i
n
v
e
n
t
o
r
y
t
u
r
n
o
v
e
r
f
o
r
t
h
e
e
n
ti
t
y
t
o
h
i
s
t
o
r
i
c
a
Chåpter 20
l
i
n
v
e
n
t
o
r
y
t
u
r
n
o
v
e
r
f
o
r
t
h
e
e
n
ti
t
y
a
n
d
t
o
t
u
r
n
o
v
e
r
o
f
o
t
h
e
r
e
Substantive Tests of Transactions
and 812
n
ti
ti
e
s
i
n
t
h
e
i
n
d
u
s
t
r
y
.
U
n
e
x
p
l
a
i
n
e
d
i
n
c
r
e
a
s
e
s
m
a
y
s
u
g
g
e
s
t
Chåpter 20
o
m
i
s
s
i
o
n
o
f
i
n
v
e
n
t
o
r
y
f
r
o
m

p
h
y
s
i
c
a
l
i
n
v
e
n
t
o
r
y
.
U
n
e
x
p
l
a
i
Substantive Tests of Transactions
and 814
n
e
d
d
e
c
r
e
a
s
e
s
m
a
y
s
u
g
g
e
s
t
o
v
e
r
s
t
a
t
e
m
e
n
t
o
r
o
b
s
o
l
e
s
c
e
n
c
e
Chåpter 20
o
f
i
n
v
e
n
t
o
r
y
.
4. S
c
a
n
i
n
v
e
n
t
o
t
y
.
A
u
d
it
o
r
s
f
r
e
q
u
e
n
tl
y
s
c
a
n
t
h
e
Substantive Tests of Transactions
and 816
i
n
v
e
n
t
o
r
y
f
o
r
u
n
u
s
u
a
l
o
r
s
l
o
w
m
o
v
i
n
g
it
e
m
s
.
W
h
e
n
i
n
v
e
n
t
o
r
y
Chåpter 20
i
s
i
n
a
c
o
m
p
u
t
e
r
f
il
e
,
t
h
e
a
u
d
it
o
r
c
a
n
s
c
a
n
t
h
e
f
il
e
f
o
r
d
a
t
e
o
f
l
a
Substantive Tests of Transactions
and 818
s
t
s
a
l
e
,
u
n
u
s
u
a
ll
y
l
a
r
g
e
q
u
a
n
ti
ti
e
s
o
r
a
m
o
u
n
t
s
o
f
i
n
v
e
n
t
o
r
y
,
Chåpter 20
l
a
r
g
e
u
n
it
p
r
i
c
e
s
,
i
n
v
e
n
t
o
r
y
s
t
o
r
e
d
a
t
u
n
u
s
u
a
l
l
o
c
a
ti
o
n
s
,
a
n
Substantive Tests of Transactions
and 820
d
s
o
o
n
.

VIII.
Prop
erty,
Plant
, and
Equi
pme
nt

Asserti
ons

Substan
tive
Audit
Proced
ures

A. Existence /
B. Occurrence
Recorded property, 1.
plant, and

equipment assets
exist. 2.

3.
Chåpter 20

c. Completeness
4. Perform analytical procedures.
All property, plant, 5. Analyze repairs and maintenance for
and equipment are expenditures that should have been
recorded. capitalized.
6. Examine lease and loan agreements to identify
any liabilities that should be recorded.

D. Rights and
obligations 7. Determine whether any liens or
mortgages have been placed on plant
property, plant, and
equipment are and equipment by examining bank
owned by the entity. confirmations and reading minutes of the
board of directors' meetings.

E. Valuation /
F. Measurement 8. Verify accuracy of recorded property,
Recorded property, plant, and equipment
9. Verify depreciation.
plant, and
equipment are
valued in
accordance with
PFRS.
p. Presentation and
disclosure 10. Review the financial statements and
Property, plant, and perform analytical procedures to
equipment are determine whether accounts are
classified and classified and disclosed in accordance
disclosed in with pFRS.
accordance with
PFRS.
B
a
l
a
n
c
e
Substantive Tests of Transactions
and 822
s

Investm
ents
Substantive

Assertions

A. Existence/
B. Occurrence Inspec
Record investments
and investment 2. Confi
inc
om

e 792
exi
st.
C
.

C income
o
m
p
l
e
t
e
n
e
s
s

3. Apply
analytic
al
procedu
res.
A
l
l
Chåpter 20
i
n
v
e
s
ü
•
n
e
n
t

disclosur
recorded.e D.

obligationsInvestments and
investment income
Investments and
are presented in
investment income
accordance with
are owned by the
PFRS.
entity.
X
E. .
Val
uaä N
on o
/ t
F.
e
Meas
s
urem
ãt
P are
Investments
valueda in
accordance
"FRS
y and
a and
investments
investment
b income
are mathematically
accurate.l
e
G.
Prese Assertions.
naüon
and
A.
Existence /
Substantive Tests of Transactions
and 824
B. s
fo
Occurrence
r
Recordedin notes
payable actually
v
exist. es
4. t
E m
x e
a nt
m s
i ac
n q
e ui
s re
u d
p d
p ur
o in
rt g
i th
n e
g p
b er
r io
o d.
k 5. E
e x
r a
s' m
a in
d e
v re
i m
c itt
e a
s n
a ce
n a
d d
p vi
a ce
i s
d fo
c r
h di
e vi
c d
k e
Chåpter 20
n es
d t
s, m
i e
n nt
t li
e st
r to
e th
st e
,
a subsi
n
d diary
d ledge
is r and
p gener
o al
s
ledge
a
ls r
o accou
f nt.
i 7. R
n ec
v al
e c
st ul
m at
e e
n in
ts te
. re
st
re
v
6. R e
e n
c u
o e
n a
c n
il d
e v
t er
h if
e y
i
n
v divide
nd
Substantive Tests of Transactions
and 826
incom m
e by a
refere n
nce to al
publis yt
hed ic
report al
s of pr
divide o
nds. ce
d
ur
es
to
d
et
8. R er
e m
v in
i e
e w
w h
t et
h h
e er
fi ac
n c
a o
n u
c nt
i s
a ar
l e
st cl
a as
t si
e fi
m e
e d
n a
ts n
a d
n •d
d is
p cl
e os
rf e
o d
r in
Chåpter 20
a able
c repr
c
esen
o
r t
d obli
a gati
n ons
c of
e
w the
it entit
h y.
P
E. V
F
R a
S l
. u
a
ü
o
2.
recorded and used as the board of
directors intended.
All n
note
s /
pay F. M
able e
3. a
are
s
reco
rded u
. r
e
4. m
e
n
Rec
ord t
ed Not
not es
es pay
able
6. are
pay 7.
Substantive Tests of Transactions
and 828
val n
ued a
l
pro
y
pert t
y. i
c
No a
l
tes p
pa r
ya o
c
ble e
are d
u
r
8. e
rec s
ord .
ed R
to e
c
res o
ult n
in c
pre i
sen l
e
tati i
on n
an t
d e
r
e
s
i
e
x
p
e
P n
e s
r e
f t
o o
m n
i o
a t
Chåpter 20
e r
s e
n
p t
a p
y e
a r
b i
l o
e d
w
a i
n t
d h
t
: h
o a
m t
p f
a o
r r
e t
h
i e
n p
t r
e e
r v
e i
s o
t u
e s
x p
p e
e r
n i
s o
e d
.
f R
o e
r v
i
t e
h w
e
s
c t
u a
r n
Substantive Tests of Transactions
and 830
d n
a s
r a
d r
e
b
a r
n e
k c
o
c r
o d
n e
f d
i
r
m
a R
t e
i a
o d
n
s t
h
t e
o
l
d o
e a
t n
e
r a
m g
i r
n e
e e
m
t e
h n
a t
t
f
a o
l r
l
t
l e
o r
a m
Chåpter 20
s p
l
a e
n d
d g
i
c n
o g
n
d o
i f
t
i a
o s
n s
s e
t
t s
h .
a
t

s
h R
o e
u c
l a
d l
c
b u
e l
a
d t
i e
s
c t
l h
o e
s
e p
d o
r
a t
n i
d o
n
f
o o
r f
Substantive Tests of Transactions
and 832
n
Share capital
transactions
C. Complete
represent ownership
ness
interests in the
entity.
All issued share

disclosure in
classified and disclosed in

accordance with with PFRS.

PFRS.

Yd. Shareholders' Equity

A. Assertions
Existence /• Substantive Audit Procedures
B. Occurrence
Share capital t. Examine the corporate charter for the
recorded as issued number of authorized shares and
actually was issued, determine that the entity is in
compliance.
and recorded 2. Examine minutes of board of directors'
dividends actually meetings for authorization to issue
were declared. shares, pay dividends, -split shares, or
purchase treasury shares.
3. Perform analytical procedures.
capital and
dec!ared dividends
are recorded.
E. Valuation
/

F. Measurem
ent
Shareholders' equity
transactions are
recorded for the
proper amounts.
D. Rights
and

obligation
s
Chåpter 20
G. Presentati
a
on andr
d
o
sclosure
f
Shareholders' equity
d
transactions are
recorded ito result in
presentation
r and
disclosuree in
accordance with
PFRS. c
4. B t
a o
s r
e s
d '
m
o e
n e
t
r i
e n
a g
d s
i ,
n d
g e
t
o e
f r
m
m i
i n
n e
u t
t h
e a
s t
a
o l
f l
d
b e
o c
Substantive Tests of Transactions
and 834
l
a s
r h
e a
d r
e
c s
a p
s l
h i
t
o s
r h
a
s v
h e
a b
r e
e e
n
d r
i e
v c
i o
d r
e d
n e
d d
s .
5. C
a
n o
d n
f
a
p i
p r
r
m
o
v
e w
d i
Chåpter 20
t a
h n
d
t s
h h
e a
r
o e
u t
t r
s a
i n
d s
e f
e
s r
h a
a g
r e
e n
t
r (
e a
g )
i t
s h
t e
r n
a u
r m
b
e
Substantive Tests of Transactions
and 836
r d
.
o a
f n
d
s O
h r
a ,
r o
e u
s t
s
d t
i a
v n
i d
d i
e n
n g
d f
s o
o
i t
s a
s n
u d
e (
d b
)
p the
a shar
ehol
i
Chåpter 20
ders c
' e
ledg a
er d
and v
reco i
ncil c
e it e
to s
the f
gen o
eral r
ledg c
er a
and s
the h
shar r
e e
cert c
ific e
ate i
boo p
k. t
Acc s
oun f
t for o
all r
cert s
ific h
ates a
. r
e
s
i
6. E s
x s
a u
m e
i d
n d
e u
r
r i
e n
m g
i t
t h
t e
a p
n e
Substantive Tests of Transactions
and 838
r ti
i f
o i
d c
a
u t
n e
d s
e f
r o
a r
u s
d h
i a
t r
. e
E s
x r
a e
m p
i u
n r
e c
h
p a
a s
i e
d d
.
c T
h r
e a
c c
k e
s a
u
a t
n h
d o
r
s i
h z
a a
r ti
e o
n
c f
e o
r r
Chåpter 20
d n
i g
v s
i .
d
e
n
d 7.
s Reca
l
t c
o
u
m l
i a
n t
u e
t e
e
s a
r
o n
f i
t n
h
g
e
s
b p
o e
a r
r s
d
h
o a
f r
d e
i a
r n
e
c d
t d
o i
r v
s i
'
d
m
e e
e n
t d
i s
Substantive Tests of Transactions
and 840
. d
T e
r a
a r
c n
e i
n
p g
o s
s a
t c
i c
n o
g u
n
o t
f .

d 8. R
i e
v c
i o
n
d c
e il
n e
d t
s h
e
s
t
h
o a
r
t e
h h
e o
l
d
r e
e r
t s
a '
i l
n e
d
e g
Chåpter 20
e f
r r
w o
i m
t
h r
e
t t
h a
e i
n
g e
e d
n
e
e
r a
a r
l n
l i
e n
d g
g s
e f
r o
. r
s
9. V h
e a
r r
i e
f d
y i
v
a i
m d
o e
u n
n d
t s
t b
r y
a r
n e
s f
f e
e r
r e
r n
e c
d e
t
Substantive Tests of Transactions
and 842
o w
t
h
t
e h
e
p f
u i
b
l n
i a
s n
h c
e
i
d
a
m l
a s
r t
k
e a
t t
p e
r m
i e
c
e n
t
o s
f t
t
h o
e
d
s e
h t
a
r e
e r
s m
. i
n
e
10. R t
e h
v a
i t
e s
h
Chåpter 20
a p
r e
e r
s
c h
a a
p r
i e
t a
a r
l e
, p
r r
e o
t p
a e
i r
n l
e y
d c
l
e a
a s
r s
n i
i f
n i
g e
s d
, ,
a d
n e
d s
c
e r
a i
r b
n e
i d
n ,
g a
s n
d
Substantive Tests of Transactions
and 844
d
i
s
c
l
o
s
e
d
.