Which Audit Procedure Is Most Closely Related to Management's Assertions

question 5

Multiple Choice

Which audit procedure is most closely related to management's assertions about the presentation and disclosure of stockholders' equity?

• A) Determining whether restrictions have been imposed on retained earnings.
• B) Counting treasury stock certificates.
• C) Inspecting minutes of the board of directors to verify that cash dividends were declared.
• D) Establishing that treasury stock is valued at cost.

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Definitions:

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial condition.

Human Capital

The skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organization or country.

Training and Development

Programs and initiatives focused on improving the skills, knowledge, and capabilities of employees through education and practical experiences.

Organizations

Groups structured and managed to meet a need or to pursue collective goals on a continuing basis.