Page 169 - DCOM509_ADVANCED_AUDITING

Advanced Auditing

Notes 2. Similarly, the number of shares issued and subscribed, and the face value of each share
should be stated together with the amount called-up per share. While showing the issued
and the subscribed capital, a distinction has be made again between the various classes of
capital i.e., ordinary share capital and preference share capital, and if there are different
classes of preference shares, their particulars should also be given.
3. In the case of redeemable preference shares, the terms of redemption or conversion should
also be stated, together with the earliest date of redemption or conversion.

4. In case the company under audit is a subsidiary of another company, the number of shares
held by the holding company as well as by the ultimate holding company and its subsidiaries
should be separately stated in giving the particulars of the subscribed capital,
5. The number of shares allotted as fully paid-up pursuant to a contract, without payments
being received in cash, and the number of shares allotted as fully paid-up bonus shares
should also be stated. The source from which bonus shares are issued should also be
specified.

6. If any calls are unpaid, the amount involved should be clearly stated, distinguishing
between the calls unpaid by directors and those unpaid by others.
7. The amount originally paid-up on forfeited shares, not yet reissued, should be shown
separately.
8. If there are any options on unlisted share capital, the particulars of the same should be
given.

Example: If the foreign collaborators of a company are entitled to subscribe to a specified
percentage of any further issue of share capital, the same should be stated.
9. The amount of share capital included in the total of the balance sheet is the amount of
share capital called-up, minus calls unpaid plus the amount originally paid-up on forfeited
shares.

Self Assessment

State whether the following statements are True or False:

18. In the case of redeemable preference shares, the terms of redemption or conversion should
also be stated, together with the earliest date of redemption or conversion.
19. The amount originally paid-up on forfeited shares, not yet reissued, should be shown
separately.
20. The source from which bonus shares are issued need not be specified in disclosure of share
capital.



Case Study South African Breweries Limited

AB Ltd. (South African Breweries Limited), is a division of SAB plc, manufactures
and distributes beer and non-alcoholic beverages in Europe, Asia and Africa. More
Sthan 200 of the organisation’s 7,000 employees work in the information systems
field. After learning about COBIT (Control Objectives for Information and related
Contd....

164 LOVELY PROFESSIONAL UNIVERSITY