In a nutshell, substantive audit procedures for share capital would include summarizing and reviewing all the equity-related transactions, their proper classifications, reconciliation of the opening balances to the balance as on the reporting date and further reviewing disclosure for compliance in accordance with the …
What is meant by audit of share capital?
Share capital means capital raised by the company by issue of shares. This issue of share capital should be audited to verify the compliance of requirements and provisions of Companies Act.
How can the auditor audit the share capital?
SEBI authorises practising Company Secretaries to undertake Reconciliation of Share Capital Audit to certify reconciliation of total shares of a company held in NSDL, CDSL and in physical form by the shareholders with the total admitted, issued and listed capital.
What is share audit?
Stock audit or inventory audit is a term that refers to physical verification of a company or institution’s inventory assets. Every business organization needs to perform an audit once a year to update and ensure that the physical stock and the computed stock match.
How do you audit shareholders equity?
My normal substantive tests for auditing equity include:
- Summarizing and reviewing all equity transactions.
- Reviewing all equity accounts for proper classification.
- Agreeing all beginning of period balances to the prior period’s ending balances.
What are the auditor duties of share capital?
An auditor can verify the Issued capital from balance sheet of the previous year. If there is any increase in the number of shares due to loans or conversion of debentures, the same has to be verified whether all the formalities were as per law.
How do you confirm share capital?
Share Capital Formula
- Formula 1: Share capital equals the issue price per share times the number of outstanding shares.
- Formula 2: Share capital equals the number of shares times the par value of stock plus the paid in capital in excess of par value.
How do you check audit capital?
The auditor should verify the partnership deed to find out the original capital contributed by each partner and the rate of interest payable on capital. Verify Capital Accounts: He should verify all the transactions affecting the capital accounts of the partner.
What do you mean by EDP audit?
An electronic data processing audit is an evaluation of the accuracy and proper function of an organization’s data processing. … If you use a computer to record your business activity and maintain this data electronically, you are a candidate for an electronic audit. Electronic Audit Techniques.
What are the classification of audit?
Specific Audit − Cash audit, Cost audit, Standard audit, Tax audit, Interim audit, Audit in depth, Management audit, Operational audit, Secretarial audit, Partial audit, Post & vouch audit, etc. are common types of specific audit. General Audit − It can be an internal or an independent Audit.
How do you audit shares?
Here are some common audit techniques to verify the issuance of stock:
- Make sure any unissued stock certificates per the stock register are present and accounted for in the stock certificate book.
- Trace shares of stock issued per the stock register to the stock certificate book to make sure they have indeed been issued.
What is meant by cost audit?
A cost audit represents the verification of cost accounts and checking on the adherence to cost accounting plan. Cost audit ascertains the accuracy of cost accounting records to ensure that they are in conformity with cost accounting principles, plans, procedures and objectives.