A Client Has a Large and Active Investment Portfolio That

question 92

Multiple Choice

A client has a large and active investment portfolio that is kept in a bank safe deposit box.If the auditors are unable to count securities at the balance-sheet date,they most likely will

• A) Request the bank to confirm to the auditors the contents of the safe deposit box at the balance-sheet date.
• B) Examine supporting evidence for transactions occurring during the year.
• C) Count the securities at a subsequent date and confirm with the bank whether securities were added or removed since the balance-sheet date.
• D) Request the client to have the bank seal the safe deposit box until the auditors can count the securities at a subsequent date.

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Definitions:

Memoranda

Brief, informal written records used to aid memory or inform others within an organization.

Deposits In Transit

Funds that have been sent to a bank but have not yet been recorded in the bank's records, leading to a discrepancy between the company’s cash records and bank statement.

Outstanding Checks

Checks recorded in the issuer's financial records that haven't been processed or cashed by the banking institution yet.

Bank Statement

A record provided by a bank that summarizes all transactions in an account for a specific period of time, showing all deposits, withdrawals, and current balance.