Performance Valuation for Portfolio Management Activities Performed by Financial Investment Companies – Analytical Procedures

Author:Professor Tatiana DĂNESCU, Ph. D., Lecturer Ovidiu SPĂTĂCEAN, Ph. D. Student



Keywords:financial investments, financial assets, portfolio management, portfolio performance, analytical procedures, investment decision

Evaluation of the results obtained from portfolio management activities are essential for the auditor to understand and, then, to test the recognition, measurement and presentation of financial assets in the financial statements, provided that the accounting policies selected and applied in this respect by management may significantly affect investment decisions undertaken by investors, with direct impact on trading prices. This paper aims to develop a specific system of analytical procedures used in asset management activities performed by the Financial Investment Companies which may be a fundamental feature in conceiving and performing financial audit programs specific to capital allocation as financial investments. In connection with the issue of construction of a system of indicators for assessing the portfolio performance, it is remarkable the approach from the perspective of portfolio managers, but it is not explored their usefulness as analytical procedures used in a financial audit conducted in investment companies. The approach of scientific research has considered, mainly, the analysis of financial statements published by the five Financial Investment Companies in the period 2006-2008, the comparison of portfolio performance in correlation with the reported net asset value and the inspection of trading reports issued by the market operator Bucharest Stock Exchange and analysis reports issued by the Romanian Association of Fund Managers.\r\n