A Client Has a Large and Active Investment Portfolio That

question 8

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:

Year

A period of 365 days (or 366 days in a leap year) used for calculating time in the Gregorian calendar.

Calculate

A mathematical determination of one or more quantities, equations, or properties.

Period

A length of time in financial reporting, typically referring to a fiscal quarter or year, over which transactions are recorded and analyzed.

Schedule of Cost of Goods Manufactured

A detailed report showing the total production costs incurred by a company to produce goods during a specific period.