Which of the Following Controls Would an Entity Most Likely

question 54

Multiple Choice

Which of the following controls would an entity most likely use in safeguarding against the loss of marketable securities?

• A)An independent custodian that has no direct contact with the employees who have recordkeeping responsibilities has possession of the securities.
• B)The internal auditor verifies the marketable securities in the entity's safe each year on the balance sheet date.
• C)The independent auditor traces all purchases and sales of marketable securities through the subsidiary ledgers to the general ledger.
• D)A designated member of the board of directors controls the securities in a bank safe-deposit box.

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Definitions:

Incorporation Process

The procedural steps required to legally form and register a corporation with state authorities, granting it legal entity status.

Lifetime Appointments

Positions or roles where the appointee serves for their entire life, commonly seen in judicial appointments to ensure independence.

Principal Place of Business

The primary location where a business entity's central operations and management are conducted.

Business Name

The official name under which a company or merchant conducts business, which may be different from its legal corporate name.