WP Ref.:
Prepared by:
Date:
Reviewed by
Date
Audit Program
(b)
Investment properties
Client:
Period:
Subject:
Investment properties
Amount in Rs.
Account balances:
Investment properties
Classes of transactions:
Depreciation / gain/ loss due to change in fair value
S. No.
Audit Objectives
Assertions
Risk Assessment
IR
1.
2.
3.
4.
5.
Investment properties are completely and
accurately recorded
CA
All recorded investment properties actually
exist.
E
Investment properties are recorded at
appropriate values.
V
Investment properties recorded are owned by
the client and title is also in the name of
client.
R
Depreciation expense / gain /loss due to
change in fair value and gain/ loss on disposal
has been accurately calculated and
appropriately disclosed.
OCATL
CR
ROSM
S. No.
Audit Objectives
Assertions
Risk Assessment
IR
6.
Note:
Investment properties and all disclosures have
been given are presented in accordance with
the Fourth Schedule of the Companies
Ordinance, 1984 and relevant IASs.
CR
ROSM
OCAL
RVU
Steps should be carried out on the basis of model (cost or fair value) adopted by the
client.
S. No.
Audit Procedures
Objective
1.
Assess the reasonableness of design of system
of internal control by enquiring relevant client
personnel and documenting the same (if not a
documented system manual has been
developed by the client). A walk through test
would be necessary to confirm the
understanding as documented. Identify the
preventive (exercised before incurrence of
transactions and event) and detective
(exercised after incurrence of transactions and
event) controls established by management to
support its assertions.
ALL
2.
Check on sample of selected transactions
covering the whole period that all preventive
controls are exercised on all transactions.
ALL
3.
Check that proper subsidiary records have
been maintained and entries are made in the
same on prompt and consistent basis and the
same is reconciled with general ledger.
Separately identifiable assets like lifts, electric
installations and other fixtures etc. should be
physically verified on periodical basis and any
adjustment is accounted for both in subsidiary
records and general ledger.
ALL
4.
Check on a sample of transactions that
detective controls are appropriately been
exercised and in case of any detection of
error/ fraud, proper steps have been taken to
avoid recurrence of the same.
5.
Ensure that management does not override the
designed controls by
Test of Controls

Enquiring from the designated staff
person

Remain skeptical during performing test
of design and test of effective operation
CE
Done by
W. P. Ref.
S. No.
6.
Audit Procedures
Objective
Document the conclusion after performing
test of controls and required level of assurance
from substantive procedures.
N/A
Analytical Procedures
1.
Assess the appropriateness of depreciation/
amortisation method and rate in view of the
flow of economic benefits and life of the
properties.
U
2.
Check the reasonableness of depreciation
expense by applying depreciation rate to
closing cost/ carrying value.
CAL
3.
Document logical commercial reasons for
major additions and disposal made during the
year
AU
4.
Compare current year balances and expense
with last year balances and ensure that any
significant variation should be properly and
logically reasoned.
CEA
Test of Details
1.
Obtain movement schedule of investment
properties both for cost and accumulated
depreciation. Check casting and cross casting
of the schedule.
CEA
2.
Trace opening balances from investment
properties' subsidiary records, general ledger
and last year’s working papers.
CE
3.
Ensure that:
(a)
Properties are owned and held by client.
(b)
Remaining useful life appears to be
correct
CEV
Done by
W. P. Ref.
S. No.
Audit Procedures
Objective
4.
If a client holds property partly held to earn
rentals or for capital appreciation and partly
held for own use then the property should be
classified as investment property only if these
portions could be sold separately (or leased
out separately under a finance lease) or if an
insignificant portion is held for own use.
Ensure the compliance with requirement of
IAS 40.
K
5.
Ensure that a property is classified as
investment property only if its cost may be
determined. Under construction properties
should not be classified as investment
properties.
K
6.
For selected capitalsations during the current
period:
(a)
Appropriate approvals and bills/
invoices and certificates.
(b)
Ensure that expenditure relating to an
investment property should be debited to
the investment property when it is
probable that future economic benefits,
in excess of the originally assessed
standard of performance of the existing
investment property, will flow to the
enterprise. All other expenditure should
be recognised as an expense in the
period in which it is incurred. .
CEV
Done by
W. P. Ref.
S. No.
7.
8.
Audit Procedures
For any property disposed of during the
current period:
(a)
Examine documents authorizing
disposal.
(b)
Examine documents supporting amounts
for which sale was affected e.g. cash
receipts
(c)
Calculate gain or loss on disposal of
fixed assts
To check depreciation expense:
(a)
Determine the reasonableness of
accounting policy and depreciation
method, rates and their consistency with
prior years.
(b)
Check calculation of depreciation.
Objective
OAL
OCAL
9.
Ensure that none of the property is impaired
or the recoverable amount of any property is
not less than its carrying amount. If the
carrying amount of an asset is more than its
recoverable amount, that same should be
reduced to recoverable amount recognising
the reduction as impairment loss.
V
10.
Inspect property documents to ensure
ownership.
R
11.
Ensure that where fair value model has been
adopted the fair value of investment property
should reflect the actual market state and
circumstances as of the balance sheet date, not
as of either a past or future date.
V
12.
Ensure that valuer's assumptions are
reasonable.
V
Done by
W. P. Ref.
S. No.
Audit Procedures
Objective
13.
Ensure that there is no restrictions on the
realisability of investment property or the
remittance of income and proceeds of
disposal.
14.
Ensure that closing balances as per our
working paper file are in match with general
ledger.
N/A
20.
Determine that disclosures have been made in
accordance with the requirements of Fourth
Schedule to the Companies Ordinance, 1984
and the IAS 40.
OCAL
RVU
Done by
W. P. Ref.