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

question 47

Multiple Choice

To establish the existence and ownership of a long-term investment in the shares of a publicly traded company, an auditor ordinarily performs a security count or:

• A) confirms the number of shares owned with the issuing company.
• B) determines the market price per share at the balance sheet date from published quotations.
• C) confirms the number of shares owned that are held by an independent custodian.
• D) relies on the client's internal control if the auditor has reasonable assurance that the control activities are being applied as prescribed.

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Definitions:

Corporations

Legal entities recognized by law, created by individuals, shareholders, or stakeholders, with rights and liabilities distinct from those of its members, and existing for purposes such as profit, nonprofit activities, or governmental tasks.

Lifestyles

The ways in which individuals or groups live, encompassing their behaviors, attitudes, values, and consumption patterns, often reflecting socioeconomic status.

Ancient Egypt

An ancient civilization concentrated along the lower reaches of the Nile River, known for its monumental architecture, hieroglyphic writing, and complex religion.

Supplemented

Enhanced or augmented by adding extra components or elements to improve or complete something.