Capital acq AA_Chapter_26

Capital acq AA_Chapter_26 - Chapter 26 Audit of the Capital...

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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong Chapter 26 Audit of the Capital Acquisition And Repayment Cycle 1. Debt Securities 2. Share Capital and Reserves Ch. 26 3 Financial instruments Debt covenants Convertible bonds Debt equity ratio
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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 1. Debt Securities Loans from money market are often in the form of bond, note or debenture Collectively and commonly termed as debt securities HKAS 32 and 39 and HKFRS 7 describe the accounting treatment on debt securities The bond indenture or the debenture deed specifies the terms, redemption dates, security and restrictions of the loan
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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 1. Debt Securities Audit objectives: Internal controls over debt securities are adequate; Debt securities are properly authorized and recorded; Recorded debt securities are bona fide; All bona fide debt securities are recorded; All the requirements and restrictions imposed by debt securities are met all the time; and The liability for debt securities, related interest expenses and accrued liability are properly stated and presented in the financial statements.
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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong
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Capital acq AA_Chapter_26 - Chapter 26 Audit of the Capital...

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