Audit work on the holding company, Auditing

Audit Work on the Holding Company

We will focus on the verification of investments in subsidiary companies.

1. Get a schedule that should contain the following information. All the data such the Companies Act needs to be disclosed in the holding company's own accounts, copies of the accounts of each and every subsidiary along with a note who that the auditor is, summary of movements in investments in subsidiary, details of any qualifications in any of the audit reports, and on current and loan accounts along with its subsidiary, reconciliations of intercompany balances.

2. Ownership and Existence must be verified through examining the share certificates and ensuring such they are in the identification of the holding company. Whether not, then blank signed transfer forms should be obtainable from the nominees. Whether the share certificates are held through third parties, after that an suitable certificate must be acquired.

3. Loan and Current accounts: Their verification is usually done through acquiring a certificate from its subsidiary verifying the balances. Also whether the auditor of the holding company is the auditor of the subsidiary, so he can reconcile entries in equally sets of books himself. The auditor must convince himself about dealings among group companies are not required to cover up material errors.

4. Valuation: Valuation is verified as follows: whether the shares were obtained in the year consider authorization and cost. Examine accounting treatment of any discount and premium upon acquisition and any dividends obtained out of pre-acquisition profits. The balance sheet value of its subsidiary might be considered and this could involve review of each individual subsidiary's account to verify that it is now a going concern.

Posted Date: 1/28/2013 4:54:35 AM | Location : United States







Related Discussions:- Audit work on the holding company, Assignment Help, Ask Question on Audit work on the holding company, Get Answer, Expert's Help, Audit work on the holding company Discussions

Write discussion on Audit work on the holding company
Your posts are moderated
Related Questions
Normal audit risk Indications that an audit is a normal risk audit are: (1) The client having management and staff who are competent and have integrity; (2) Where the client h

Insurance Companies Authoritative documents involved as: The Insurance Act The Companies Act IFRS 4 Insurance Contracts The major legislation governing insu

Valuation and Allocation - Audit Process As we saw assets are usually valued at cost or a valuation less a provision for usage or loss of value.  We have to ensure therefore t

Types of Transaction - Related Party Fundamentally two types of transactions which arise between a related party and a company as: A. It is usual for members of a collectio

Comparison of the Negative and Positive Methods Negative Method According to this method of circularisation, the customer is asked to communicate only when he does not ag

What is business risk and what controls should organizations have in place?  Business Risk and Controls Business or operational risks related to the activities carried out

Following three frameworks/ concepts are an integral part of the ‘world of auditing' which may be used by auditors throughout their audit engagements. (i) Overview of the audit

The Need for an Audit If you take an example of a modern large liability company, we can clearly distinguish between the providers of funds and those who control those funds. The

why are the figures presented to an auditor not sufficient for absolute reliance

Post Balance Sheet Events Post balance sheet events occupy a very significant place in auditing and hence there is generally a program of work which is carried out in this are