Substantive Tests (実証的検証）
それぞれの科目に存在する固有リスクに関連するManagement Assertions（C O V E R)を理解し、それを実証するために、どのようなSubstativeTestsを行うべきか・・・とMCではこの考え方が大事ではないかと思ってます。
というわけで、以前からまとめようと考えていた科目別、重要Mgmt Assertions/ SubstantiveTestsを、今日は書くことにします。
- Existence: select sample of sales for period from sales journal and match invoices to shipping documents.
- Valuation: From samle selected for exisece esting, match invoice total to sales journal. Tie sales journal to GL
- Rights and Obligations: Test cut-off (Examine sales orders & shipping documents for serveral days before and after year-end to veify that ales were recorded in proper period)
2. Operating Expenses
- Existence/ Completeness: in general, test using analytical procedures (for example, compare PY & CY expense account balance in total and as a percent of sales)
3. Investment Income
- Valuation: Recalculate gains/losses on sales to securities and discount/premium amortization. Test reasonableness of dividend and interest income by recalculation
- Existence: Send bank confirmations for all open bank accounts.
- Rights and Obligations: Tes cut-off (Examine sample of bank transactions for several days before and after year-end to verify that cash transactions were recorded in proper period)
- Existence: Inventry count observation and test counts (Vouch from client's physical inventory report to actual inventory) GAAS requirement
- Completeness: Inventory count observation and test counts (Trace from actual inventory o client's phsical inventory report). GAAS requiremen
- Rights and Obligations: Test Cut-off (examine purchase orders & eceiving reports, sales orders & shipping documents for several days before and after year-end t verify taht purchases and sales were recorded in proper period.)
- Valuation: inventory price testing (Select sample of inventory items and compare price per unit i booksto most recet invoice to verify LCM valuation). Also, look for obsolete goods during inventory observation
3. Accounts Receivable
- Existence: Confirmation (Select sample of customers with year-end AR balances and send confirmation letter to cutomer toverify AR balance). Positive confirmation - should be returned by customer whether AR balance ccorect or incorrect. Negative confirmation- returned by customer only if balance incorrect. For positive confirmations with no response, perform alternative procefures (examine subsequentcash receipts, or,if no subsequent receipt, verify sale by examining invoice and shipping documents)
- Rights and Obligations: verfied through confirmation
- Valuation: Recalculate allowance for bad debt and examine management's methodologyfor caluculating allowance for rasonableness. Also testedthrough AR confirmation.
4. Long-Term Investments
- Existence: If managed by 3rd party, confirm securities owned with 3rd party If securities managed by client, perform a count of securities on hand.
- Rights and Obligations: Test cut-off (examine purchase and sales of investments for several days before and after year-end to verify that transactions were recorded in poper period). Also verify through confirmation
- Presentation & Disclosure: review and evaluate clien methods of classification of long-term investments (trading, AFS, HTM)
5. Fixed Assets
- Existence:: Vouch additions o fixed assets (select sample of additions from fixed asset ledger and tie to supporting invoice/purchase requisition). Physical inspect fixed asset additions when possible.
- Rights and Obligations: If significant number of purchases and disposals, test cut-off (examine purchases and disposa before and after year-end t verify taht purchases and dispoals were recorded in the proper period).
- Valuation: Recalculate depreciation expense and gains/losses on disposals.
COVER: Management Assertions
O: Obligations and Rights
R: Reports- Presentations and Disclosure