When an Entity Uses a Trust Company as Custodian of Its

question 14

Multiple Choice

When an entity uses a trust company as custodian of its marketable securities, the possibility of concealing fraud most likely would be reduced if the

• A) Trust company has no direct contact with the entity employees responsible for maintaining investment accounting records.
• B) Securities are registered in the name of the trust company, rather than the entity itself.
• C) Interest and dividend checks are mailed directly to an entity employee who is authorized to sell securities.
• D) Trust company places the securities in a bank safe-deposit vault under the custodian's exclusive control.

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