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In this session, we cover auditing the investment cycle.

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0:00 Introduction
Here is a summary of the video:

The video discusses auditing the investment cycle, including internal controls and audit procedures (0:02).

Key points covered are:

Internal Controls: The importance of strong internal controls, especially for investments, and the key areas of initiation, authorization, processing, and fair value measurement (1:50).
Fair Value: The video explains the importance of fair value, and the different levels (Level 1, Level 2, and Level 3), and the need for specialist for level 3 (4:26).
Disclosure: Disclosing investment strategies, risk levels, and any loans backed by investments (6:14).
Audit Procedures: The importance of verifying the investments are real, properly valued, accurately recorded, and disclosed (7:53).
Investment Activity Schedule: Auditors receive a schedule of investment activity from the client, reconcile it, and trace it to the general ledger (8:18).
Broker Confirmation: The video explains the use of broker confirmation to verify the existence of investments (11:33).
Valuation and Realizable Value: The video highlights the need to confirm financial statements are properly recorded at fair value and to determine if there are any impairment losses (15:53).
Analytical Procedures: The video explains that these are not as helpful for the investment cycle due to market fluctuations, but they can be useful for estimating interest and dividend income (18:01).




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