Which of the Following Forms of Evidence Would Be Least

question 124

Multiple Choice

Which of the following forms of evidence would be least persuasive in forming the auditor's opinion about marketable securities and other investments held by the company?

• A) responses to auditor's questions by the president and controller regarding the investments account
• B) correspondence with a stockbroker regarding the quantity of client's investments held in street name by the broker
• C) minutes of the board of directors authorizing the purchase of stock as an investment
• D) the auditor's count of marketable securities

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Definitions:

Coupon Rate

The interest rate on a bond that the issuer promises to pay annually or semi-annually to the bondholder.

Market Yield

The annual income on an investment divided by the market price of the investment, typically expressed as a percentage.

Premium

The amount by which the price of a security exceeds its principal amount or its value at issuance.

Discount

The reduction from the full amount or value of something, especially the price of a financial instrument or merchandise.