Lesson: Auditing the Investment Cycle

confirm it with anyone else, then it's potentially overstating assets. In this lesson, the proper controls and segregation of duties within the investment cycle are discussed. Techniques for testing the accuracy of investment records and authorization processes are covered, as well as verifying that investments are adequately collateralized. The lesson dives into the importance of establishing internal controls and ensuring that the organization's risk tolerance is considered in investment decisions. The existence assertion for investments is also examined, with emphasis on confirming the existence of assets and evaluating associated transactions. Confirmation with third parties, reviewing contracts, and visiting locations of financial institutions involved in the investments are presented as methods for verifying the existence of investments.