Ellie Enterprises †Deloitte Audit Case Essay

Alternative InvestmentsAmong the five gold, trine of the inventorys, cloudy Retirement 500 Index, Cloudy High-Yield Hedge Strategies, and Cloudy sincere Estate All starts, be alternate enthronisations. Those three silver, as the theatrical role states, are non registered under the Investment club Act of 1940 or under the Securities Act of 1933. Thus, they are not offered to the investing public or are not been required to offer signififannyt information to public. Moreover, the investment product held by Cloudy High-Yield Hedge Strategies is hedge fund. It is not handed-down investment, such as stock or bonds, and is difficult to determine the sure market determine.Existence of the investmentsThe confirmation did not nominate sufficient competent audit evidences to support the humans of the investments thitherfore, the date team up up must fare redundant procedures. AU Session 332 states, Confirmation of the holdings on a security-by-security institution typi bring forwardy would constitute adequate audit evidence with respect to the existence assertion. The confirmation Union provided, which is on fund-by-fund basis, is not detail enough to typically be considered as adequate audit evidence. Moreover, the audited financial statement of the alternative investment, which could provide signifi chamberpott audit evidence, is not available before the egress run across of the attendants report on Ellies consolidated financial statements. This event further nurtures that the appointment team needs to conduct substantive procedures. To survey the existence of the investments, following procedures can be performed. First, the engagement team can request transactions affect in each five of funds during the funds fiscal years. Actual transactions prove that Ellies investments harbour been held in those five opposite funds.Second, as the case states, the committee periodically review cast surgical process and assets allocation. Therefo re, the Committee must kept reports and memos regarding their plan performance or discussions with Union. The engagement team can collect archives connect to Ellies investments in those five funds from Ellie and Union. Documents from the investor entity and trustee entity can prove the existence of investment activities. Moreover, by comparing those documents, the engagement team can test whether Unions investment behavior has aligned with the strategies orany adjustments made to the Ellies investments. An example can further illustrate. For example, the Committee decided to switch the investment allocation. It is expected to see Union held documents which confine details showing the change of the strategy, specific investment that Union made, and the performance after adjustments. Such documents are sufficient evidence to prove that Ellies investments are in the funds and being appropriately management by Union. Lastly but no lease, obtaining related information directly from a third party may also be helpful in this case. The engagement team can directly contact five fund managers and inquire them whether Ellies investments were held in the funds.Value of the investmentsSimply confirming investments in the aggregate neither prove the existence of the investments, nor support the paygrade of the investments. Furthermore, there is a time lag in reporting between the date of the financial statements of the funds and the date of the auditors report on Ellies consolidated financial statements thus, the engagement team should perform additional procedures. Cloudy Retirement intermediate-Term U.S. TreasuryTo confirmation the accuracy of the amount of divide held by Ellie, the engagement team could request the fund manager to provide documents stating the amount of shares held by Ellie. This fund is registered with the SEC under the Investment caller-up Act of 1940 and under the Securities Act of 1933. Normally quoted market prices for such funds are availab le from sources such as financial publications, the exchanges, or NASDAQ. The engagement team could obtain the quoted market prices of the fund and check the prices with those on the confirmation. Cloudy High-Yield Hedge StrategiesSince this fund is not registered with SEC under the Investment Company Act of 1940 or under the Securities Act of 1933, the engagement team is inefficient to get quoted market prices and equality with numbers on the confirmation. However, the engagement team could request a more detailed confirmation providing information of the cardinal investments. Next step the engagement team can channel is to estimate the vestigial investment and the reasonableness of the assumptions used in fair value calculation. Sinceevaluation may involve a lot of specialized friendship and techniques, the engagement team could employ a specialist. Under the situation that the engagement team did not receive a detailed confirmation of the underlying investments, there are s everal procedures can help with the assessment.First, the engagement team can collect previously audited financial statement for the funds to compare information the team obtains for this year. If Ellie didnt make a lot of change on its investments and the performance of funds held by Ellie are stable in recent years, but investment balance of this year is very different from ones of previous years, the engagement team need to increase the risk and take a closer look at the evaluation of Ellies investment of this year. Other than previously audited financial statement for the funds, meeting minutes, memos, or summaries that document valuation or judgments made during managing the investment are evidence that auditor should collect and review to help assessment. Second, the engagement team can call or visit the auditors of Union to ask their opinion about the valuation of the investments that Union managed. Besides, the engagement team also could pick some attempt transactions and t hen test the fair value measurement involved in those transactions to see whether the fair value measurement are reasonable or comply with industry standard. Last but not least, the auditing team can directly contact the five fund managers to check out Ellies balance.