Audit of Financial Instruments - A Practical Workshop

Introduction

Every business will have financial instruments. Whether this is just a bank account, some debtors and perhaps some cash, or more complex arrangements such as preference shares and currency forward contracts, it is an area that is likely to feature in every audit.

The accounting treatment can be quite complex, the valuations will be subjective and dynamic, and the amounts involved may well be material, highly material.

Presented by expert speaker David Potts, this seminar is designed to show how all these issues should be best dealt with as part of a statutory audit. This is a practical session and will include workshop examples and case studies.

What You Will Learn

This course will cover the following:

• Summary of key requirements of FRS 102 relating to financial instruments and additional guidance and options available under IFRS
• Valuation whether at fair value or amortised cost
• Which category of fair value to use - level 1, 2 or 3?
• Treatment of income expenses, gains and losses
• Recognition and derecognition criteria
• Measurement of common but more complex financial instruments
• Preference shares with dividend payment and redemption obligations
• Share options - including those embedded in other financial instruments
• Interest rate forward agreements
• Foreign currency contracts
• Key audit issues
• Risk assessment of key estimates and assumptions used in valuation
• Audit evidence needed, how to challenge not simply corroborate
• Audit documentation requirements, the key matters to include
• Audit work required on the disclosures in the financial statements
• And don’t forget the ‘big picture’ looking at issues such as going concern and fraud