In performing risk assessment procedures for investments, an auditor may inquire of the client personnel which of the following questions? O Is access to investment securities restricted to at least two authorized officials? O Are the duties of authorization, custody, recording keeping and valuation of investment securities transactions segregated? O All of the choices. O Are investment securities acquisitions and disposals properly authorized by the board of directors?

In performing risk assessment procedures for investments, an auditor may inquire of the client personnel which of the following questions? O Is access to investment securities restricted to at least two authorized officials? O Are the duties of authorization, custody, recording keeping and valuation of investment securities transactions segregated? O All of the choices. O Are investment securities acquisitions and disposals properly authorized by the board of directors?

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

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

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

Chapter10: Auditing Cash And Marketable Securities

Section: Chapter Questions

Problem 67RSCQ

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23. In performing risk assessment procedures for investments, an auditor may inquire of the client personnel which of the following questions? Group of answer choices Are the duties of authorization, custody, recording keeping and valuation of investment securities transactions segregated? Are investment securities acquisitions and disposals properly authorized by the board of directors? Is access to investment securities restricted to at least two authorized officials? All of the choices.
Following are typical questions that might appear on an internal control questionnaire for investments in marketable securities. Is custody of investment securities maintained by an employee who does not maintain the detailed records of the securities? Are securities registered in the company name? Are investment activities reviewed by an investment committee of the board of directors? Describe the manner in which each of the above procedures might be tested.
Following are typical questions that might appear on an internal control questionnaire for investments in marketable securities. Is custody of investment securities maintained by an employee who does not maintain the detailed records of the securities? Are securities registered in the company name? Are investment activities reviewed by an investment committee of the board of directors? Describe the purpose of each of the above controls.
An auditor's primary substantive procedures for investments typically include inspection of securities held by the client and confirmation of securities held by third parties. Which of the following assertion(s) is(are) addressed by the audit procedures previously mentioned? * A. I and IV B. I, II and IV C. II and IV D. I and VII An auditor's primary substantive procedures for investments typically include detailed review of minutes of meeting and review financial statement presentation and disclosure of investments including related account. Which of the following assertion(s) is(are) addressed by the audit procedures previously mentioned? * A. III and V B. V and VIII C. III, VI and VIII D. V, VII and VIII
Which of the following audit procedures would not likely be performed for audits of investments?a. Read board of directors’ minutes for authorization of investment strategies.b. Confirm investments with registrar.c. Confirm investments with broker or trustee.d. Compare valuation to published market prices.
Following are typical questions that might appear on an internal control questionnaire for investments in marketable securities. Is custody of investment securities maintained by an employee who does not maintain the detailed records of the securities? Are securities registered in the company name? Are investment activities reviewed by an investment committee of the board of directors? Assuming that the operating effectiveness of each of the above procedures is found to be inadequate, describe how the auditors might alter their substantive procedures to compensate for the increased level of control risk.
In performing risk assessment procedures for investments, an auditor may inquire of the client personnel which of the following questions? a. Are investment records periodically reconciled to actual listing of investments (i.e., per count or investment custodian statement)? b. Is there independent review of investments measured at fair value based on market valuation? c. Is investment income independently recalculated? d. All of the choices
When auditing an investment in another company, an auditor most likely would seek to conduct which audit procedure to help satisfy the valuation assertion?a. Inspect the stock certificates evidencing the investment.b. Examine the audited financial statements of the investee company.c. Review the broker’s advice or canceled check for the investment’s acquisition.d. Obtain market quotations from The Wall Street Journal or another independent source.
In performing risk assessment procedures for investments, an auditor may inquire of the client personnel which of the following questions? A. Is there independent review of investments measured at fair value based on market valuation? B. Is investment income independently recalculated? C. All of the choices D. Are investment records periodically reconciled to actual listing of investments (example: per count ot investment custodian statement)?
When auditing an investment in another company, an auditor most likely would seek to conduct which audit procedure to help satisfy the valuation assertion?a. Inspect the stock certificates evidencing the investment.b. Examine the audited financial statements of the investee company.c. Review the broker’s advice or canceled check for the investment’s acquisition.
The following are auditor's primary substantive procedures in auditing investments, except: * A. Assessing potential future investments B. Verifying existence and ownership of securities C. Investigating current and potential impairments of investments D. Reviewing appropriateness of presentation and adequacy of disclosure
During the auditor's risk assessment procedures, a meeting was held together with the company's management. During the meeting, management has discussed that the company recently acquired bond securities from various government agencies and publicly listed shares. In light of this, the audit senior asked the management about the company's investment policy, risk appetite and investment objectives. The audit senior's inquiry would most likely address which assertion? a. Rights and obligations b. Occurence c. Completeness d. Valuation