Course Introduction
The Financial Instruments and Investment Auditing Training Course provides a comprehensive framework for auditing investments, financial instruments, and related accounting and reporting processes. Participants will develop practical skills for evaluating the existence, ownership, classification, valuation, completeness, presentation, and disclosure of financial instruments held or issued by an organization.
The course examines major categories of financial instruments, including investments in equity and debt securities, loans and receivables, deposits, derivatives, and other financial assets and liabilities. Participants will explore the accounting and audit considerations associated with different instruments while learning how to identify significant risks arising from complex transactions and valuation judgments.
A major focus is placed on valuation and measurement, particularly where financial instruments are carried at fair value or require significant management estimates. Participants will learn how to evaluate pricing sources, valuation models, observable and unobservable inputs, market data, expected credit losses, and other assumptions that may significantly influence reported financial results.
The program also addresses investment authorization, portfolio management, custody arrangements, broker relationships, reconciliations, confirmations, and transaction processing. Participants will learn how to assess internal controls over investment activities and identify weaknesses that could lead to unauthorized transactions, inaccurate valuations, missing assets, fraud, or financial reporting misstatements.
Participants will develop audit procedures for testing investment purchases and sales, interest income, dividends, realized and unrealized gains and losses, impairment, classifications, and period-end balances. The course emphasizes obtaining reliable evidence through external confirmations, custodian statements, broker reports, market data, contracts, and independent valuation procedures.
Through practical case studies, investment portfolio reviews, valuation exercises, analytical procedures, and audit working-paper applications, participants will strengthen their ability to audit complex financial instruments. By completing the course, they will be better equipped to assess investment risks, challenge valuation assumptions, identify control deficiencies, and communicate significant audit findings effectively.
Duration
5 days
Who Should Attend
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Internal auditors responsible for reviewing investment portfolios and financial instrument activities.
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External auditors performing financial statement audits involving investments and financial instruments.
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Accountants responsible for investment accounting, financial instrument measurement, and reporting.
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Financial controllers overseeing investment balances, valuations, and financial reporting.
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Finance managers responsible for investment policies, portfolio monitoring, and financial controls.
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Treasury professionals managing investments, deposits, borrowing, and financial market transactions.
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Investment managers and portfolio professionals seeking stronger understanding of audit and control requirements.
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Risk professionals assessing market, credit, liquidity, valuation, and investment-related risks.
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Compliance professionals monitoring investment policies, authorization requirements, and regulatory controls.
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Valuation professionals supporting financial instrument measurement and fair value assessments.
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Fraud investigators examining unauthorized investments, fictitious assets, manipulated valuations, or unusual transactions.
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Audit managers and supervisors responsible for reviewing financial instrument audit procedures.
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Accounting and auditing consultants providing assurance and advisory services.
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Professionals involved in banking, treasury, investment management, or corporate finance functions.
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Finance and audit professionals preparing for responsibilities involving financial instrument accounting and investment auditing.
Course Objectives
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Develop a comprehensive understanding of financial instruments, investment categories, audit assertions, risks, controls, and financial reporting considerations.
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Apply risk-based audit procedures to establish the existence, ownership, completeness, classification, valuation, and presentation of investment balances.
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Evaluate internal controls over investment authorization, transaction processing, custody, reconciliation, valuation, reporting, and portfolio monitoring.
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Audit purchases, sales, maturities, interest income, dividends, realized gains and losses, and other investment-related transactions using appropriate evidence.
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Assess financial instrument classification and determine whether instruments are appropriately accounted for based on their characteristics and management's objectives.
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Evaluate fair value measurements, pricing sources, valuation models, market inputs, and management assumptions used for complex financial instruments.
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Assess credit risk and expected credit loss considerations affecting debt instruments, loans, receivables, and other financial assets.
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Identify fraud and control risks involving unauthorized investments, fictitious securities, concealed losses, manipulated valuations, and inappropriate transactions.
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Perform effective reconciliations between investment registers, custodian statements, broker records, bank accounts, and general ledger balances.
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Prepare high-quality audit working papers and communicate financial instrument findings, valuation issues, control deficiencies, and reporting recommendations effectively.
Comprehensive Course Outline
Module 1: Financial Instruments and Investment Audit Fundamentals
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Understand the nature, characteristics, and major categories of financial instruments and investment assets.
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Examine financial instrument audit assertions, materiality considerations, inherent risks, and common sources of financial misstatement.
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Review the investment lifecycle from authorization and acquisition through valuation, income recognition, disposal, and reporting.
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Develop a risk-based audit strategy for evaluating investment portfolios, financial instruments, controls, and disclosures.
Module 2: Investment Policies, Governance, and Internal Controls
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Evaluate investment policies, delegated authorities, risk limits, approval procedures, and governance arrangements.
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Assess segregation of duties between investment decisions, transaction execution, custody, accounting, reconciliation, and reporting.
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Review controls over broker selection, counterparty management, investment mandates, confirmations, and portfolio monitoring.
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Identify control weaknesses that could result in unauthorized investments, financial losses, inaccurate records, or inappropriate transactions.
Module 3: Investment Transactions and Accounting Records
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Audit investment purchases and sales by examining contracts, trade confirmations, settlement records, approvals, and supporting documentation.
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Test transaction dates, quantities, prices, commissions, fees, settlement amounts, and accounting entries for accuracy and completeness.
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Reconcile investment registers with broker statements, custodian records, bank accounts, and general ledger balances.
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Identify unusual transactions, unsupported entries, delayed settlements, missing documentation, and unexplained differences requiring investigation.
Module 4: Investment Classification and Measurement
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Evaluate the classification of financial assets and liabilities based on their contractual characteristics and applicable accounting requirements.
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Assess whether management's classification decisions are supported by documented policies, investment objectives, and transaction characteristics.
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Examine measurement bases and accounting treatments applied to different categories of investments and financial instruments.
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Identify classification errors that could affect reported income, fair values, impairment, equity, and financial statement disclosures.
Module 5: Fair Value and Financial Instrument Valuation
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Understand valuation principles and evaluate the reliability of prices, market data, broker quotations, and independent valuation sources.
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Test fair value calculations using observable market inputs, valuation models, contractual terms, and independently sourced information.
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Assess valuation models, assumptions, discount rates, yield curves, volatility measures, and other significant inputs used for complex instruments.
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Identify valuation uncertainty, pricing inconsistencies, stale prices, unsupported assumptions, and other indicators requiring additional audit procedures.
Module 6: Debt Instruments, Credit Risk, and Expected Losses
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Audit debt securities, loans, deposits, and other credit-sensitive financial assets for existence, valuation, and recoverability.
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Evaluate credit risk information, counterparty ratings, delinquency indicators, collateral, default history, and other relevant evidence.
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Assess expected credit loss methodologies, assumptions, probability estimates, forward-looking information, and management overlays.
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Reperform selected calculations and investigate significant differences between recorded impairment amounts and independently developed audit expectations.
Module 7: Equity Investments, Income, and Investment Performance
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Audit equity investments by verifying ownership, quantities, market values, acquisition costs, and transaction documentation.
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Test dividend income, interest income, realized gains and losses, and other investment-related revenue for completeness and accuracy.
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Evaluate portfolio performance reports and investigate unusual movements, significant gains or losses, and unexpected investment returns.
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Reconcile investment income and valuation changes to supporting statements, market information, accounting records, and financial reporting disclosures.
Module 8: Derivatives, Complex Instruments, and Specialized Investments
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Examine audit considerations for derivatives, forwards, swaps, options, structured products, and other complex financial instruments.
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Review contracts and confirm key terms, notional amounts, maturity dates, counterparties, collateral arrangements, and settlement conditions.
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Evaluate valuation models and significant assumptions used for instruments without readily observable market prices.
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Assess risks involving embedded features, hedge relationships, contractual modifications, and complex financial reporting treatments.
Module 9: Fraud Risks, Confirmations, and Investment Evidence
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Identify fraud risks involving fictitious securities, unauthorized transactions, concealed losses, manipulated valuations, and inappropriate investment classifications.
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Design effective confirmation procedures with banks, custodians, brokers, counterparties, and other external parties.
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Evaluate the reliability of investment statements, third-party reports, market data, management representations, and internally generated records.
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Investigate unusual investment transactions, manual adjustments, unexplained transfers, related-party activity, and other potential fraud indicators.
Module 10: Audit Completion, Reporting, and Practical Case Studies
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Evaluate financial instrument audit findings and determine the impact of identified misstatements, valuation issues, and control deficiencies.
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Prepare comprehensive working papers documenting risks, procedures, valuation evidence, reconciliations, exceptions, conclusions, and management responses.
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Assess financial statement presentation and disclosures relating to investment balances, valuation techniques, credit risks, and financial instrument exposures.
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Apply integrated case studies involving investment portfolios, fair value measurements, credit losses, derivatives, reconciliations, fraud risks, and disclosure issues.
Training Approach
This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.
Tailor-Made Course
This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: training@upskilldevelopment.com Tel: +254 721 331 808
Training Venue
The training will be held at our Upskill Training Centre. We also offer training for a group (at a discount of 10% to 50%) at requested location all over the world. The Onsite course fee covers the course tuition, training materials, two break refreshments, buffet lunch, airport transfers, Upskill gift package, and guided tour.
Visa application, travel expenses, dinners, accommodation, insurance, and other personal expenses are catered by the participant
Certification
Participants will be issued with Upskill certificate upon completion of this course.
Airport Pickup and Accommodation
Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: training@upskilldevelopment.com, +254 721 331 808
Terms of Payment:
Unless otherwise agreed between the two parties’ payment of the course fee should be done 3 working days before commencement of the training so as to enable us to prepare better.
