When an Auditor Is Unable to Inspect and Count an Entity's

question 61

Multiple Choice

When an auditor is unable to inspect and count an entity's investment securities until after the balance sheet date, the bank where the securities are held in a safe-deposit box should be notified on or before the balance sheet date that it will be asked to:

• A)verify any differences between the contents of the box and the balances in the entity's subsidiary ledger.
• B)provide a list of securities added and removed from the box between the balance sheet date and the security-count date.
• C)confirm that there has been no access to the box between the balance sheet date and the security-count date.
• D)count the securities in the box so that the auditor will have an independent direct verification.

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Definitions:

403b Plan

A tax-advantaged retirement savings plan available to employees of educational institutions and certain non-profit organizations.

Salary Reduction

A decrease in the amount of an employee's pay before taxes as agreed upon by the employer and employee, often in exchange for some benefit such as enhanced retirement contributions.

Tax Bracket

Categories that determine the rate at which income is taxed based on income levels.

403b Plan

A retirement savings plan available to certain employees of public schools and nonprofits, allowing them to save a portion of their salary in a tax-deferred account.