The Reported Fair Market Value of Securities Held by the Client

question 33

Multiple Choice

The reported fair market value of securities held by the client can be verified by the auditor by

• A)comparing the values to those securities held by the auditing firm.
• B)confirming the fair values with the client as of the close of the year.
• C)comparing the fair values with the fair values of similar securities.
• D)comparing the fair values to credible publications and websites.

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Definitions:

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a company's assets over time.

Units-Of-Activity

A depreciation method that allocates the cost of an asset over its useful life based on the number of units it produces or the hours it operates.

Double-Declining-Balance

An accelerated method of depreciation that doubles the standard depreciation rate, resulting in higher depreciation expenses in the earlier years of an asset's life.

Residual Value

The salvage value of an asset after its period of use has ended, reflecting its remaining worth.