In Performing Tests Concerning the Granting of Stock Options, an Auditor

question 18

Multiple Choice

In performing tests concerning the granting of stock options, an auditor should

• A) Confirm the transaction with the Secretary of State in the state of incorporation.
• B) Verify the existence of option holders in the entity's payroll records or stock ledgers.
• C) Determine that sufficient treasury stock is available to cover any new stock issued.
• D) Trace the authorization for the transaction to a vote of the board of directors.

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Definitions:

Reengineering

involves the radical redesign of core business processes to achieve dramatic improvements in productivity, cycle times, and quality.

Incremental Improvements

Small, gradual changes or enhancements made to a process, product, or service to improve efficiency, quality, or performance.

Consortium

A group of companies, universities, or other organizations that collaborate on a common project or share resources to achieve a common goal.

OD Efforts

Initiatives taken as part of Organization Development, aimed at improving organizational effectiveness, health, and capacity through planned interventions.