Pallavi Sattiraju (CA Final) (51 Points)
11 May 2011Could any one tell me how to do the audit for investments made in mutual fund by a company.How do i get the cost of investment as on report date.Please answer it as soon as possible..Thanks in advance!!
Amol Gopal Kabra (CA,CS,DISA)
(Practicing CA)
(8639 Points)
Replied 11 May 2011
In the audit of mutual funds, you just need to check the following things.
- Date of Purchase of the fund
- Verify the allotment letters and check whether they are in the name of the company only
- Mode of payment and the proof of payment
- Whether the company holds the mutual funds as on the reporting date also
- Also demand for the closing statements of the same as you need to verify the same for the purpose of above point, i.e. whether the company holds it or its liquidated.
- If the investment is for short term, then it should be disclosed @ lower of closing market rate of the reporting date, or the cost of purchase.
- If the investment is for long term, then it should be disclosed at cost of acquisition only.
- In case you need to verify the closing NAV, i.e. the unit value, you can browse the specific mutual fund's website wherein you can get such information.
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