ACCA AA Syllabus D. Audit Evidence - Share capital, reserves and directors’ emoluments - Notes ^{18 / 18}

Substantive procedures - Share Capital

• Check authorised share capital is consistent with the company’s constitution

• Check the nominal value of shares issued during the year to supporting documentation

• Ensure share issue terms were complied with

• Check cash received for shares is properly recorded in the main ledger (not to sales)

• Check issued share capital agrees with the register of members/shareholders

Substantive procedures - Reserves

• Get a list of mooooovements in reserves

• Check their accuracy to supporting documentation

• Check no legal requirements have been broken (eg. Improper use of share premium account)

• Check dividends have only been taken from a legally distributable reserve (eg NOT share premium)

• Check authorisation for dividend

• Check total dividend = dividend per share x number of shares

Substantive procedures for directors’ remuneration

1. Obtain a schedule of the directors’ remuneration

2. Agree a sample of the individual monthly salary payments and the bonus payment to the payroll records

3. Confirm the amount of each bonus paid by agreeing to the cash book and bank statements

4. Agree the amounts paid per director to board minutes

5. Obtain a written representation from management confirming the completeness of directors’ remuneration including the
   bonus

6. Review the disclosures made regarding the directors’ remuneration and assess whether these are in compliance with
   local legislation