Audit of Investments. For several years you have made the annual audit for Sichou Jinhuangse Company of Nanjing, China. This company is not a dealer in securities. A list of presently held securities is kept, but an investment register is not maintained. During the audit, the following worksheet was prepared:

Column no. Column heading 1 Description of security (name, maturity, rate, etc.)

Balance at beginning of year 2 Face value or number of shares 3, Cost or book value Additions during period 4 Date 5 Face value or number of shares 6 Cost Deductions during period 7 Date 8 Face value or number of shares 9 Cost or book value 10 Proceeds on disposals (net)

11 Profit or (loss) on disposals Balance at end of year 12 Face value or number of shares 13 Cost or book value 14 Market value Interest and dividends 15 Accrued at beginning of year 16 Purchased 17 Earned 18 Received 19 Accrued at end of year

Required

Draw a line down the middle of a lined sheet of paper (see Illustration 12.5 ‘Investments’).

A. On the left of the line, state the specific source(s) of information to be entered in each column and, where required, how the data of previous columns are combined.

B. On the right of the line, state the principal way(s) that such information would be tested.