State the Four Audit Concerns for Capital Stock and Describe

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The Answer is The four most important audit objectives for capital stock are:
1.Existing share capital transactions are recorded (completeness).If a registrar or transfer agent is used,the auditor confirms balances and transactions with them.
The auditor may also review minutes of board of directors' meetings and examine client-held share records.
2.Recorded share capital transactions exist and are accurately recorded (occurrence and accuracy).All share capital transactions are verified (e.g. ,due to mergers,issuance,or repurchase)by looking for authorizations in the minutes of board of directors' meetings and agreements with share transfer agent records (using confirmations or physical inspection at their offices).Changes due to mergers and acquisitions will require inspection of relevant legal documents and may require auditor specialist assistance on the audit team.
3.Share capital is accurately recorded (accuracy).Confirmation with the share transfer agent will provide balances and details.If the auditor inspects share records,then the auditor would verify mechanical accuracy of the records,check that certificates (if used)are properly cancelled,and determine that complex types of capital (such as convertible securities)have been properly figured into the calculations.
4.Share capital is fully presented and clearly disclosed (completeness and understandability).
Based upon review of the prior audit working paper file,articles of incorporation and minutes of director' meetings,the auditor evaluates the completeness and quality of disclosure.Items to consider are type of capital,terms,amounts,dividend declaration dates,and similar matters.

State the Four Audit Concerns for Capital Stock and Describe

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