Audit procedures for share capital, distributions and reserves (2)

Question 1

Dividends (dividends authority calculation share capital)

Answer 1

Agree dividends paid and declared pre-year-end to authority in minute books and reperform calculation with total share capital issued to decide whether there are any outstanding or unclaimed dividends

Question 2

Dividends (documentary payments)

Answer 2

Agree dividend payments to documentary evidence (returned dividend warrant(s))

Question 3

Dividends (contravene provisions)

Answer 3

Test that dividends do not contravene distribution provisions by reviewing the legislation

Question 4

Reserves (movements authority)

Answer 4

Agree movements on reserves to supporting authority

Question 5

Reserves (movements reserves legislation constitution)

Answer 5

Ensure that movements on reserves do not contravene the legislation and company’s constitution by reviewing the legislation

Question 6

Reserves (confirm distinguish distributable)

Answer 6

Confirm that the company can distinguish distributable reserves from those that are non-distributable

Question 7

Reserves (appropriate disclosures inspection)

Answer 7

Ensure that appropriate disclosures of movements on reserves are made in company’s accounts by inspection of FSs