Investments Audit Working Paper
(Following draft may be used as an example)
Background:
{{client_name}} holds investments classified as non-current and current, including quoted equity instruments, mutual funds, debt securities, fixed deposits with banks (with maturity > 12 months / ≤ 12 months as applicable) and investments in subsidiaries / associates / joint ventures.
Purpose:
To document the audit work on the existence, completeness, valuation, classification and disclosure of investments held by {{client_name}} as at {{period_end}}, in accordance with Ind AS 109 / AS 13, Ind AS 32, Ind AS 113 (fair value) and applicable Standards on Auditing.
Work Done:
1. Classification and Reconciliation
- Obtained the investment schedule from management, segregated into non-current and current categories, and by class (equity, debt, mutual funds, FDs, subsidiaries / associates / JVs).
- Reconciled the total of the investment schedule to the trial balance and the financial statements.
- Verified classification under Ind AS 109 (FVTPL / FVOCI / Amortised Cost) and tested the business-model assessment + SPPI test where relevant.
2. Existence
- For quoted investments held in dematerialised form, obtained the demat holding statement (NSDL / CDSL) as at {{period_end}} and reconciled to the books.
- For physical share certificates, sighted the certificates and traced to the investment schedule.
- For investments in mutual funds, obtained CAS / AMC statements at the balance sheet date.
- For fixed deposits, obtained FD certificates / bank confirmation directly under SA 505.
3. Acquisitions and Disposals during the Year
- Selected a sample of purchases and sales; agreed cost / sale consideration to broker contract notes, demat transaction history and bank statements.
- Recomputed gain / loss on disposal and verified its recognition in profit & loss (FVTPL) or OCI (FVOCI), with cumulative re-classification adjustment where applicable.
- Verified compliance with Section 186 of the Companies Act, 2013 (limits, board / shareholder approval) for new investments.
4. Valuation and Fair Value Measurement
- For quoted equity / mutual funds: agreed the fair value to NSE/BSE closing price or AMC NAV at the balance sheet date.
- For unquoted investments: reviewed management's valuation methodology, key inputs (DCF assumptions, comparable multiples) and Level-3 fair-value disclosures under Ind AS 113.
- For debt instruments measured at amortised cost: recomputed EIR-based amortisation and tested for ECL under Ind AS 109.
- For investments in subsidiaries / associates / JVs in standalone FS: verified carrying value at cost and tested for impairment indicators (Ind AS 36).
5. Income Recognition
- Verified dividend income against demat statements and bank credits; checked TDS reconciliation with Form 26AS.
- Recomputed interest income on debt instruments / FDs using the EIR method.
- Verified that fair-value gains / losses are taken to the correct line (P&L vs OCI) per classification.
6. Compliance with CARO 2020 Clause 3(iii)
- Identified loans / advances / investments / guarantees granted during the year and reviewed terms, recovery and overdues.
- Documented prescribed disclosures: aggregate amount granted, balances outstanding, percentage to total relevant balance, and parties involved.
- Confirmed disclosure of related-party investments in line with Ind AS 24 / AS 18 and Section 188.
Variance Analysis
| Particulars | Previous Year (₹) | Current Year (₹) | Variance (%) | Remarks |
|---|
| Non-current Investments — Equity | | | | |
| Non-current Investments — Subsidiaries / Associates / JV | | | | |
| Non-current Investments — Debt / Bonds | | | | |
| Current Investments — Mutual Funds | | | | |
| Current Investments — Other | | | | |
| Dividend income | | | | |
| Interest income on investments | | | | |
| Fair value gain / (loss) | | | | |
Conclusion:
Based on the procedures performed, investments held as at {{period_end}} are recorded, classified, measured and disclosed in accordance with Ind AS 109 / AS 13, Ind AS 32 and Ind AS 113. CARO 2020 clause 3(iii) disclosures are complete and accurate. Income from investments is recognised in the appropriate period and account. No material misstatements were identified.
