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

question 66

Multiple Choice

To establish the existence and ownership of a large long-term investment in the common stock of a publicly traded company,the auditors ordinarily perform a security count or:

• A)Rely on the client's internal controls if the auditors have reasonable assurance that the control procedures are being applied as prescribed.
• B)Confirm the number of shares owned that are held by an independent custodian.
• C)Determine the market price per share at the balance sheet date from published quotations.
• D)Confirm the number of shares owned with the issuing company.

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Definitions:

Written Defense

A formal argument, often in writing, defending a particular thesis, idea, or action.

Hazardous Material

Substances that pose significant risks to health, safety, or property, requiring special handling and regulations.

Immediate Action

A prompt response or decision required or undertaken to address an urgent situation or need.

Commanding Tone

A style of communication that expresses authority, requiring attention or obedience from the audience.