In Establishing the Existence and Ownership of a Long-Term Investment

question 1037

Multiple Choice

In establishing the existence and ownership of a long-term investment in the form of publicly-traded stock, an auditor should inspect the securities or:

• A) Correspond with the investee company to verify the number of shares owned.
• B) Inspect the audited financial statements of the investee company.
• C) Confirm the number of shares owned that are held by an independent custodian.
• D) Determine that the investment is carried at the lower of cost or market.

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Definitions:

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Franchise

A system in which entrepreneurs purchase the rights to open and run a business from a larger corporation.

Personal Brand

The unique combination of skills, experiences, and personality that one actively communicates to the world, particularly in professional contexts.

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