Final answer:
Substantive procedures for testing the valuation of financial investments aim to confirm the accuracy of the financial statements, focusing on the fairness and precision of investment figures.
Step-by-step explanation:
Substantive procedures to test the valuation of financial investments will best confirm the accuracy of the financial statements. This involves assessing the methods and assumptions used to value financial investments, ensuring they are in line with relevant accounting standards and that the resulting figures reflect the investment's fair value. It may include comparing investments to market values, reviewing management's valuation processes, and testing the calculations used for investments that are not publicly traded.
While other options like existence, completeness, and occurrence are also important assertions in the audit process, valuation procedures specifically target the precision and correctness of the investment figures reported in the financial statements.
These procedures involve examining the supporting documentation and evidence to ensure that the valuations recorded in the financial statements are reasonable and in accordance with accounting standards.
For example, auditors may review external market prices, compare valuations to historical cost and fair value, and assess the reasonableness of assumptions used in the valuation process.