Answered: If the client corporation declared a…

If the client corporation declared a share-split or stock-split, the auditor should determine that there are enough retained earnings during the declaration.

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter13: Auditing Debt, Equity, And Long-term Liabilities Requiring Management Estimates

Section: Chapter Questions

Problem 24RQSC

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True or False?
If the client corporation declared a share-split or stock-split, the auditor should determine that there are enough retained earnings during the declaration.

Definition Definition Remaining net income of the company after the required dividends are paid to shareholders. This surplus money is usually invested back into the business to expand its business operations or launch a new product.

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