To Establish the Existence and Ownership of a Long-Term Investment

question 531

Multiple Choice

To establish the existence and ownership of a long-term investment in the common stock of a publiclytraded company, an auditor ordinarily performs a security count or:

• A) Relies on the client's internal accounting controls if the auditor has reasonable assurance that the control activities are being applied as prescribed.
• B) Confirms the number of shares owned that are held by an independent custodian.
• C) Determines the market price per share at the balance sheet date from published quotations.
• D) Confirms the number of shares owned with the issuing company.

---

Definitions:

Primary Decisions

Refers to the initial, fundamental choices made in any context that set the direction or strategy to be followed.

Monitor or Take Action

The decision-making process in management or leadership that involves observing situations and deciding whether to intervene or not.

Vision

The ability to think about or plan the future with imagination or wisdom, often providing direction for an individual or organization.

Personality Profiles

Comprehensive descriptions of an individual's characteristics, traits, and tendencies, often used in psychological assessments.