In a Manufacturing Company,which One of the Following Audit Procedures

question 11

Multiple Choice

In a manufacturing company,which one of the following audit procedures would give the least assurance for the existence of the general ledger balance of investment in stocks and bonds at the audit date?

• A) Confirmation from the broker.
• B) Inspection and count of stocks and bonds.
• C) Vouching all changes during the year to brokers' advices and statements.
• D) Examination of canceled checks issued in payment of securities purchased.

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Definitions:

Insolvent

A financial state where an individual or entity cannot meet their debt obligations as they come due or has liabilities exceeding assets.

Fiduciary Duty

Fiduciary duty is a legal obligation of one party to act in the best interest of another when entrusted with certain responsibilities, primarily in financial matters.

Secretly Competes

When an individual or entity engages in competition against another party without their knowledge, often violating a trust or agreement.

Business Transaction

The process of buying, selling, or exchanging goods, services, or any kind of financial relation between businesses or between a business and a consumer.