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:

Auditory Nerve

The cranial nerve that transmits sound information from the cochlea of the inner ear to the brain, essential for hearing.

Basilar Membrane

A crucial structure in the cochlea of the inner ear, responsible for translating sound vibrations into neural signals by the movement of its hair cells.

Basilar Membrane

A core component of the cochlea in the inner ear, playing a critical role in the sense of hearing by vibrating in response to sound.

Pinna

The visible part of the ear that is outside the head, responsible for collecting sound waves and funneling them into the ear canal.