Ingrid Shalansky, an audit senior, was given the task of auditing the investment section of Crabapple Ltd. Examining the investments, she found the following transactions had occurred during the year;
· Receipt of dividends relating to an equity investment
· Purchase of shares in a few different public companies (Crabapple does not have any significant influence or control in these companies)
· Sale of a debt investment (Crabapple recognized a gain on this sale)
1) Ingrid has been asked to briefly summarize the different types of investments and the accounting required for each type.
2) Identify one specific substantive procedure that Ingrid would need to perform to verify each of the above transactions.