Which of the Following Control Activities Would an Entity Most

question 55

Multiple Choice

Which of the following control activities would an entity most likely use to assist in satisfying the completeness assertion related to long-term investments?

• A) Senior management verifies that securities in the bank safe-deposit box are registered in the entity's name.
• B) The internal auditor compares the securities in the bank safe-deposit box with recorded investments.
• C) The treasurer vouches the acquisition of securities by comparing brokers' advices with canceled checks.
• D) The controller compares the current market prices of recorded investments with the brokers' advices on file.

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Definitions:

Solvency

The ability of a firm to pay its debts as they come due.

Current Ratio

A financial ratio that is computed by dividing current assets by current liabilities.

Fiscal Year

A 12-month period used for accounting purposes and preparing financial statements, which may not align with the calendar year.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term and long-term obligations, calculated as current assets divided by current liabilities.