Audit substantive procedures for Equity.

Here are substantive procedures for auditing equity part of statement of financial position

Share capital

  • Check authorized and issued share capital if complied with legal requirement
  • For share capital issued during the year, auditor should check:
  1. Cash received is properly recorded in the accounts
  2. Supporting documents and ensure that all legal requirements have been complied with
  • Agree amount of of share capital in statement of financial position with register of members


  • Obtain the list of all reserves from client (with opening balance, additions and closing balance) 
  • Check accuracy of listing of client with supporting documents
  • Ensure that legal requirements relating to reserves have been complied (e.g regarding use of share premium)
  • Check calculation of dividends and ensure that payment is consistent with issued share capital
  • Check authorization of payments of dividend and ensure that it has been paid in accordance with legal requirements.

1 thought on “Audit substantive procedures for Equity.”

  1. Pingback: Equity Dividend Cover ratio/meaning/formula. - ACCA ONLINE ACCOUNTING TEACHER

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