Larkin, CPA, has been engaged to audit the financial statements of Vernon Distributors, Inc., a continuing audit client, for the year ended September 30, 19X1. After obtaining an understanding of Vernon's internal control, Larkin assessed control risk at the maximum level for all financial statement assertions concerning investments. Larkin determined that Vernon is unable to exercise significant influence over any investee and none are related parties.

Larkin obtained from Vernon detailed analysis of its investments in domestic securities showing

- The classification between current and noncurrent portfolios.

- A description of each security, including the interest rate and maturity date of bonds and par value and dividend rate on stocks.

- A notation of the location of each security, either in the treasurer's safe or held by an independent custodian.
- The number of shares of stock or face amount of bonds held at the beginning and end of the year.
- The beginning and ending balances at cost and at market, and the unamortized premium or discount on bonds.
- Additions to and sales from the portfolios for the year, including date, number of shares, face amount of bonds, cost, proceeds, and realized gain or loss.
- Valuation allowances at the beginning and end of the year and changes therein.
- Accrued investment income for each investment at the beginning and end of the year, and income earned and collected during the year.
Larkin then prepared the following partial audit program of substantive auditing procedures:
1. Foot and cross foot the analyses.
2. Trace the ending totals to the general ledger and financial statements.
3. Trace the beginning balances to the prior year's working papers.
4. Obtain positive confirmation as of the balance sheet date of the investments held by any independent custodian.
5. Determine that income from investments has been properly recorded as accrued or collected by reference to published sources, by computation, and by tracing to recorded amounts.
6. For investments in nonpublic entities, compare carrying value to information in the most recently available audited financial statements.
7. Determine that all transfers between the current and noncurrent portfolios have been properly authorized and recorded.
Required:

a. Identify the primary financial statement assertion relative to investments that would be addressed by each of the procedures No. 4 through No. 7 and describe the primary audit objective of performing that procedure. Use the format illustrated below.

b. Describe three additional substantive auditing procedures Larkin should consider in auditing Vernon's investments.

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Primary Assertion Objective