1. Obtain or compile a detailed list of long-term equity investments, check whether the increase is correct, and check with the total amount of general ledger and subsidiary ledger; Whether the accounts for impairment provision of consolidated long-term equity investment are consistent with the number of statements.
2. According to relevant contracts and documents, confirm the equity proportion and holding time of equity investment, and check whether the accounting method of equity investment is correct.
3. For major investments, prove to the investee the investment amount, shareholding ratio and dividends paid by the investee.
4. The long-term equity investment that should be accounted for by the equity method shall obtain the annual financial statements of the invested entity audited by certified public accountants. If it has not been audited by a certified public accountant, we should consider implementing appropriate auditing or examination procedures for the financial statements of the investee:
(1) When reviewing the investment income, the net profit of the investee should be adjusted and confirmed based on the fair value of the identifiable assets of the investee at the time of obtaining the investment; If the accounting policies and accounting periods adopted by the investee are inconsistent with those of the auditee, the financial statements of the investee shall be adjusted according to the accounting policies and accounting periods of the auditee, and the investment profits and losses shall be confirmed.
(2) Check the recalculated investment income with the investment income calculated by the audited entity. If there are significant differences, find out the reasons and make appropriate adjustments.
(3) Check whether the audited entity accounts for the long-term equity investment according to the equity method. When confirming that the net loss of the investee should be shared, the book value of the long-term equity investment should be written off first, and then the book value of other long-term equity (such as long-term receivables) that substantially constitute the net investment of the investee should be written off; If the audited entity still needs to bear the additional loss obligation according to the investment contract and agreement, it shall confirm the estimated liabilities according to the estimated obligations and check with the corresponding figures in the estimated liabilities; If the investee is profitable in the future, the audited entity will resume to confirm the income share after its income share makes up for the unconfirmed loss share. When auditing, we should check whether the accounting treatment of the audited entity is correct.
(4) Check whether the changes in the owner's equity of the investee other than the net profit and loss are included in the owner's equity.
5. For the long-term equity investment accounted by the cost method, check the original vouchers of dividend distribution and distribution resolution to determine whether the accounting treatment is correct; The long-term equity investment controlled by the audited entity and accounted for by the cost method shall be prepared in accordance with the equity method for consolidated statements.
6. The conversion between cost method and equity method, and check whether the determination of investment cost is correct.
7. Determine whether the change record of long-term equity investment is complete:
(1) Check the long-term equity investment increased in this period, and trace it back to the original vouchers, relevant documents or resolutions, the capital verification report or financial data of the investee, and confirm whether the long-term equity investment conforms to the provisions of the investment contract and agreement, whether it has actually been invested, and whether the accounting treatment is correct.
(2) Check the reduced long-term equity investment in the current period, trace back the original documents, and confirm that there are reasonable reasons and authorized approval procedures for the recovery of long-term equity investment, the investment has been recovered, and the accounting treatment is correct.
8. Check the long-term equity investment item by item at the end of the period to determine whether the long-term equity investment is impaired:
(1) Check whether the provision for impairment of long-term equity investment in the current period is consistent with the previous year. If there are differences, find out the reasons for policy adjustment, determine the impact of policy changes on current profits and losses, and submit them to the audited entity for appropriate disclosure.
(2) Check the long-term equity investment item by item, and judge whether there are signs of impairment of the long-term equity investment according to the changes in the operating policies and legal environment, market demand, industry and profitability of the invested unit. If the recoverable amount of the long-term equity investment is lower than the book value, the impairment reserve for the long-term equity investment shall be accrued for the difference between the recoverable amount and the book value. And check with the accumulated amount of the audited entity. If there are differences, find out the reasons.
(3) Check the amount of impairment reserve accrued in the current period with the corresponding figures of asset impairment loss in the income statement.
(4) The provision for impairment of long-term equity investment shall be accrued according to individual assets, with sufficient basis and appropriate approval. Once the impairment loss is confirmed, it shall not be reversed in future accounting periods.
9 combined with the inspection of bank loans, etc. To find out whether there is pledge or guarantee for long-term equity investment. If so, it shall be recorded in detail and submitted to the audited entity for full disclosure.
10. Confirm that the long-term equity investment has been properly presented on the balance sheet. Discuss with the staff of the audited entity to determine whether the ability of the invested entity to transfer funds to the audited entity is limited due to the influence of its country and region. If so, the restricted situation shall be recorded in detail and submitted to the audited entity for full disclosure.