In Performing Tests Concerning the Granting of Stock Options, an Auditor

question 18

Multiple Choice

In performing tests concerning the granting of stock options, an auditor should

• A) Confirm the transaction with the Secretary of State in the state of incorporation.
• B) Verify the existence of option holders in the entity's payroll records or stock ledgers.
• C) Determine that sufficient treasury stock is available to cover any new stock issued.
• D) Trace the authorization for the transaction to a vote of the board of directors.

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Definitions:

Fluid-Mosaic Model

Model for the plasma membrane based on the changing location and pattern of protein molecules in a fluid phospholipid bilayer.

Phospholipid Bilayer

The fundamental structure of biological membranes, consisting of two layers of phospholipids that create a barrier around cells.

Glycolipids

Molecules consisting of a carbohydrate bonded to a lipid, play key roles in cell recognition and membrane structure.

Blood Type

A classification of blood based on the presence or absence of inherited antigenic substances on the surface of red blood cells.