Intermediate Audit Staff Training: Auditing Investments
Author: Robert K Minniti
| CPE Credit: |
2 hours for CPAs |
This intermediate level course prepares audit professionals to evaluate and audit investment portfolios—an area that presents heightened risk due to fair value measurements, complex financial instruments, and rapidly changing market conditions. Participants will learn how to assess classification, valuation, disclosure, and impairment considerations for investment securities under U.S. GAAP and PCAOB standards.
Using real world examples and practical applications, the course explores auditing traditional investments (equity and debt securities), alternative investments (hedge funds, private equity, venture capital), derivatives, and structured products. Participants will gain hands on experience evaluating management’s valuation models, auditing Level 1–3 fair value measurements, reviewing specialist work, and testing internal controls over investment authorization, monitoring, and reporting.
By the end of the program, attendees will be equipped with the audit strategies, documentation techniques, and professional skepticism needed to effectively audit high risk investment areas and improve overall audit quality.
Publication Date: May 2026
Designed For
This course is ideal for audit professionals responsible for evaluating complex financial instruments, fair value measurements, and higher‑risk financial reporting areas.
Topics Covered
- Overview of investment types and associated audit risks
- U.S. GAAP requirements for classification, measurement, impairment, and disclosure
- Fair value hierarchy: Levels 1, 2, and 3 considerations
- Testing valuation models, assumptions, and third‑party pricing sources
- Auditing derivatives, alternative investments, and complex instruments
- Internal control testing for investment authorization and monitoring
- Substantive audit procedures for existence, valuation, and cutoff
- Using valuation specialists and evaluating specialist reports
- Fraud risks and red flags in investment portfolios
- Documentation best practices and common audit pitfalls
Learning Objectives
- Identify common types of investments and apply U.S. GAAP requirements for recognition, classification, valuation, and disclosure
- Identify risks of material misstatement related to valuation, impairment, classification, and completeness of investments
- Evaluate internal controls over investment authorization, monitoring, and financial reporting
- List and test fair value hierarchy levels, including management’s valuation models, inputs, and assumptions
- Design and perform substantive procedures for investment existence, valuation, and presentation
- Determine when reliance on valuation specialists is appropriate and assess the sufficiency of their work
- Recognize fraud risks, red flags, and bias related to investment performance and fair value reporting
Level
Intermediate
Instructional Method
Self-Study
NASBA Field of Study
Auditing (2 hours)
Program Prerequisites
Basic understanding of auditing principles
Advance Preparation
None
