Specific Audit Procedures Performed for Capital Investments

Author:Univ. Prof. PhD Tatiana DĂNESCU, Univ. Lecturer PhD Student Ovidiu Ioan SPĂTĂCEAN

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Keywords:investment companies, capital investments, financial instruments, control risk, internal control, accounting policies, substantive tests

Abstract:
Equity investments in financial instruments traded on a regulated capital market have a significant share in total assets managed by investment firms acting as institutional investors. From this perspective, the risks associated with financial investments are material in the audit approach and misstatements of financial statements generated by misappropriate recognition or valuation of these financial assets leads most often to the expression of qualified opinions from financial auditors. The paper deals with specific procedures for the identification and assessment of control risk associated with capital investment and describes substantial tests for capital investments in response to auditors’ assessed risks, to ensure an efficient performance of audit engagements within investment companies.\r\n

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