In Establishing the Existence and Ownership of a Long-Term Investment

question 34

Multiple Choice

In establishing the existence and ownership of a long-term investment in stock of a publicly traded company, an auditor should inspect the securities or

• A) Correspond with the investee company to verify the number of shares owned.
• B) Inspect the audited financial statements of the investee company.
• C) Confirm the number of shares owned that are held by an independent custodian.
• D) Determine that the investment is carried at the lower-of-cost-or-market.

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Definitions:

Gross Domestic Product

A measure of the economic performance of a country, calculating the total value of all goods and services produced within its borders in a specific time period.

U.S. GDP

The total market value of all final goods and services produced within the United States in a given year, a primary indicator of the country's economic health and performance.

Increased

Describes something that has grown or risen in number, size, value, or extent.

Communism

A political and economic ideology advocating for a classless society and the abolition of private property, where goods and services are shared by the community.