By underwriting of shares, it is - A. O convenient to get the accounts of the company audited B.easier to collect capital for the company c.easier to get the company registered D.easier to enter into contracts with the promoters of company
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By underwriting of shares, it is
- A. O convenient to get the accounts of the company audited
B.easier to collect capital for the company
c.easier to get the company registered
D.easier to enter into contracts with the promoters of company
Step by step
Solved in 3 steps
- TCO A) You are auditing a company that owns 22% of the voting common stock of another corporation and uses the equity method to account for the investment. How would you verify that the equity method is appropriate in this case?In establishing the existence and ownership of an investment held by a corporationin the form of publicly traded stock, an auditor should inspect the securities or(1) obtain written representations from management confirming that the securitiesare properly classified as trading securities.(2) inspect the audited financial statements of the investee company.(3) confirm the number of shares owned that are held by an independent custodian.(4) determine that the investment is carried at the lower of cost or market.Which of the following is not true of a registration statement? A . It helps the SEC make judgments about the worth of securities. B. It contains financial statements certified by independent public accountants. C. It provides information about the management of the company. D. It is different for different types of companies that offer securities for sale.
- When a client company does not maintain its own capital stock records, the auditors should obtain written confirmation from the transfer agent and registrar concerninga. Restrictions on the payment of dividends.b. The number of shares issued and outstanding.c. Guarantees of preferred stock liquidation value.d. The number of shares subject to agreements to repurchase.Which of the following statements is NOT CORRECT? (A) Going public establishes a firm's true intrinsic value and ensures that a liquid market will always exist for the firm's shares (B) Publicly owned companies have sold shares to investors who are not associated with management, and they must register with and report to a regulatory agency such as the SEC. (C) When stock in a closely held corporation is offered to the public for the first time, the transaction is called "going public." and the market for such stock is called the new issue market (D) It is possible for a firm to go public and yet not raise any additional new capital (E) When a coporation';s shares are owned by a few individuals who own most of the stock or are part of the firm's management, we say that the firm is "closaly, or privately, held.Wilson's Corporation is one of your new audit clients. The corporation's accountant is incertain how to report earnings per share in accordance with IFRS and is requesting that you provide the following information. Define the term 'earnings per share' as it applies to a corporation with a capitalization structure composed of only one class of ordinary shares. Explain how earnings per share should be computed and how the information should be disclosed in the corporation's financial statements.
- Which of the following statements is CORRECT? A The stock of publicly owned companies does not need to be registered with and reported to a regulatory agency such as the SEC. B When a corporation's shares are owned by a few individuals, we say that the firm is publicly traded. C "Going public" establishes a firm's true intrinsic value and ensures that a liquid market will always exist for the firm's shares. D When stock in a closely held corporation is offered to the public for the first time, the transaction is called "going public, or an IPO," and the market for such stock is called the new issue or IPO market. E If a firm goes public, it will always raise additional new capital for the firm itself.An open election allows investors to ____________________ . a) have early access to sensitive information pertaining to the company. b) appoint managers to the company. c) determine if a dividend should be issued.Which of the following statements is NOT CORRECT? When a corporation’s shares are owned by a few individuals who own most of the stock or are part of the firm’s management, we say that the firm is “closely, or privately, held.” “Going public” establishes a firm’s true intrinsic value and ensures that a liquid market will always exist for the firm’s shares. Publicly owned companies have sold shares to investors who are not associated with management, and they must register with and report to a regulatory agency such as the SEC. When stock in a closely held corporation is offered to the public for the first time, the transaction is called “going public,” and the market for such stock is called the new issue market.
- You are a CPA who has been hired by DEF Company to assist with their incorporation process. Prepare a memo to the president of DEF explaining the different statuses of shares of stock: authorized shares, issued shares, outstanding shares, and treasury shares.You are a consultant working with various companies that are considering incorporating and listing shares on a stock exchange. One of your clients asks you about the various acronyms she has been hearing in conjunction with financial analysis. Explain the following acronyms and how they measure different things but may complement each other: EPS (earnings per share), EBITDA (earnings before interest, taxes, depreciation, and amortization), and NOPAT (net operating profit after taxes).The stockholders of a company are: the owners policy setters responsible and liable for the financial well-being of the company operating within the company as independent shareholders
