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.

Q: Users of audited financial statements include: Management Stockholders Bond holders All of the above

A: The answer is as fallows

Q: A well-financed audit client of a CPA firm invests large amounts in marketable securities. As part…

A: Marketable securities are highly liquid current assets that include bonds, stocks, etc.  which can…

Q: What does the term scope of audit refer to? How would you describe the scope of audit of a listed…

A: An audit is important because it provides legitimacy to a set of financial statements and gives…

Q: Which of the following audit procedures would not likely be performed for audits of shareholders’…

A: Audit procedures for auditing shareholder’s equity mainly include the number of authorized, issued…

Q: Does an audit guarantee a fair presentation of a company’s financial statements

A: Audit is defined as an inspection or examination of an organization’s books of accounts; by an…

Q: Which of the following audit objectives is to validate the assertion of existence? *   A. All…

A: Financial statement assertions, also known as management assertions, are a company's official…

Q: Which of the following audit procedures would not likely be performed for audits of investments?a.…

A: Audit procedure for auditing investments may include following: Confirmation with the issuer…

Q: In performing risk assessment procedures for investments, an auditor may inquire of the client…

A:

Q: How can the auditor determine that all dividends applicable to marketable securities owned by the…

A: Dividends: This is the amount of cash distributed to stockholders by a company from its earnings in…

Q: In performing risk assessment procedures for investments, an auditor may inquire of the client…

A: The question is related to the risk assessment procedure of Investments. Risk assessment is the…

Q: Which of the following may not be included in a typical audit program for auditing Retained…

A:

Q: In testing the valuation of the company's quoted investments in stocks measured at fair value, the…

A: Note: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered…

Q: In auditing a company's Shareholders' Equity, the proceeds from the sale of donated capital should…

A: Shareholders’ Equity shows how much the owner has invested in the business.

Q: If the auditors discover that the carrying amount of a client’s investments is overstated because of…

A: Investment Securities: Investment securities can be stated as those securities that are acquired by…

Q: The treasury department maintains the custody over the company's investments. Both the accounting…

A: Since treasury department maintains the custody over the company’s investment.Therefore,

Q: Below ais the summary of the SEC listing requirements for the audit committee responsibilities of…

A: Answer:  (a).         Independent directors are more likely to stand up to management and report…

Q: During the auditor's risk assessment procedures, a meeting was held together with the company's…

A: The auditor tests for the asset and liabilities based on their characteristics to ensure that the…

Q: Which of the following audit objectives is to validate the assertion of classification? *   A.…

A: B. Income statement related items are appropriately recorded in the proper accounts in the statement…

Q: Wilson's Corporation is one of your new audit clients. The corporation's accountant is uncertain how…

A: Earnings per Share ( EPS): Company profit divided by the outstanding shares of its common stock.…

Q: The following are auditor's primary substantive procedures in auditing investments, except: *   A.…

A: Auditor: An auditor is a person or a group of people who is responsible for conducting an audit of…

Q: Describe the manner in which each of the above procedures might be tested.

A: Test of control:   Test of control is performed by the auditor to verify that the control process…

Q: When auditing an investment in another company, an auditor most likely would seek to conduct which…

A: Definition: Valuation assertion is the manage assertion where it is ensured that the valuation of…

Q: When auditing an investment in another company, an auditor most likely would seek to conduct which…

A: Valuation assertion of investments involves verifying if the value of the asset stated in the books…

Q: You are auditing a company that owns 22% of the voting common stock of another corporation and uses…

A: Equity method: Equity method refers to a type of accounting used for investment between companies.…

Q: Audit Objectives and Procedures for Investments. In the audit of investment securities, auditors…

A:

Q: An auditor's primary substantive procedures for investments typically include inspection of…

A: Answer: As per Q/A guidelines, first question has been answered. Assertions are the basic terms that…

Q: In performing tests concerning the granting of stock options, an auditor should(1) confirm the…

A: Auditing means the inspection of financial accounts of the company to determine if the records are…

Q: Which of the following audit procedures would be most relevant when examiningthe completeness…

A: Introduction: Auditing means a systematic examination of books to verify the authenticity and…

Q: An auditor working with a publicly traded client learns that the client has been completing stock…

A: Auditor has to find out and determine the authenticity of the financial statements and also have to…

Q: Which of the following audit objectives is to validate the assertion of presentation and disclosure?…

A: The income statement includes the revenues and expenses for the company. Whereas, balance sheet…

Q: The treasury department maintains the custody over the company's investments. Both the accounting…

A: Answer:-  Reconciliation :- Reconciliation is a procedure where two sets of records are compare with…

Q: Following are typical questions that might appear on an internal control questionnaire for…

A: Internal controls are defined as the procedures, mechanisms and rules executed through company in…

Q: Wilson's Corporation is one of your new audit clients. The corporation's accountant is incertain how…

A: Earnings per share: Earnings per share is a profit earned per share from an organization earnings.…

Q: Evaluating the accounting methods used and testing the valuation of securities is a primary audit…

A: As auditors, we often evaluate numerous audit assertions such as existence, completeness, valuation,…

Q: In performing risk assessment procedures for investments, an auditor may inquire of the client…

A: Risk Management: Risk assessment is a term used to describe the overall process or method where you:…

Q: Which of the following may not be included in a typical audit program for auditing Retained…

A: as an auditor this is usual examination of all the all transaction in the audit of retained earning…

Q: Substantive audit procedures Existence/Occurrence(E/O) Rights &obligations(R/O) Completeness(C)…

A: Auditing of the financial position as well as the financial records of the organization are…

Q: When a client company does not maintain its own capital stock records, the auditors should obtain…

A: Written Confirmation:  The document that serves as supporting evidence which is obtained during an…

Q: The treasury department maintains the custody over the company's investments. Both the accounting…

A: In order to have an effective internal control, it is imperative that there is a segregation of…

Q: In performing risk assessment procedures for investments, an auditor may inquire of the client…

A: In performing risk assessment procedures for investments, an auditor may inquire of the client…

Q: An auditor's primary substantive procedures for investments typically include confirmation of…

A: As auditors, we often evaluate numerous audit assertions such as existence, completeness, valuation,…

Q: Which of the following audit objectives is to validate the assertion of valuation and allocation? *…

A: Throughout the auditing process, assertions seem to be declarations that determine whether or not…

Q: An auditor working with a publicly traded client learns that the client has been completing stock…

A: The answer for the question on the insider trading is discussed hereunder : What is insider trading?…

Q: The auditor has a responsibility to design audit procedures to obtain sufficient and appropriate…

A: The question is based on the concept of Auditing. As per Bartleby guidelines we are allowed to…

Q: The auditor asked for the general information sheet of the company. Which of the following assertion…

A: An auditor is a person who audits the books of the company. The auditor is an authorized person who…

Q: Which of the following transactions will not have a direct effect on a company's Retained Earnings…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: The following represent controls over authorization of acquisition and disposal of investments,…

A: Investment purchases and disposals should be authorized in accordance with the company policyAn…