The treasury department maintains the custody over the company's investments. Both the accounting and treasury maintain its own records over investments. During the company's month end procedures, the person that should reconcile the investment records and the actual securities on hand should be: a. The investment committee b. An independent person in the treasury department c. An independent person in the accounting department d.The accounting staff recording investment transactions
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The treasury department maintains the custody over the company's investments. Both the accounting and treasury maintain its own records over investments. During the company's month end procedures, the person that should reconcile the investment records and the actual securities on hand should be:
a. The investment committee
b. An independent person in the treasury department
c. An independent person in the accounting department
d.The accounting staff recording investment transactions
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- The treasury department maintains the custody over the company's investments. Both the accounting and treasury maintain its own records over investments. During the company's month end procedures, the person that should reconcile the investment records and the actual securities on hand should be: Group of answer choices The investment committee An independent person in the treasury department An independent person in the accounting department The accounting staff recording investment transactionsThe treasury department maintains the custody over the company's investments. Both the accounting and treasury maintain its own records over investments. During the company's month end procedures, the person that should reconcile the investment records and the actual securities on hand should be: The investment committee An independent person in the treasury department An independent person in the accounting department The accounting staff recording investment transactionsCassandra Corporation, a manufacturing company, periodically invests large sums in marketable equity securities. The investment committee of the board of directors established the investment policy. The treasurer is responsible for carrying out the investment committee's directives. All securities are stored in a bank safe deposit vault. Your internal control questionnaire with respect to Cassandra's investment in equity securities contains the following three questions: Is the investment policy established by the investment committee of the board of directors? Is the treasurer solely responsible for carrying out the investment committee's directive? Are all securities stored in a bank safe deposit vault? In addition to these three questions, what questions should your internal control questionnaire include with respect to the company's investment in marketable equity securities? (Hint: Prepare questions to cover management's transaction assertions of occurrence, completeness, cutoff,…
- A well-financed audit client of a CPA firm invests large amounts in marketable securities. As part of its internal control, the company uses a monthly report of securities transactions. the report is prepared by the controller and presented to the investment committee of the board of directors. What information should this report contain?A client has a large and active investment portfolio that is kept in a bank safe deposit box. If the auditors are unable to count securities at the balance sheet date, they most likely willa. Request the bank to confirm to the auditors the contents of the safe deposit box at the balance-sheet date.b. Examine supporting evidence for transactions occurring during the year. c. Count the securities at a subsequent date and confirm with the bank whether securities were added or removed since the balance-sheet date.d. Request the client to have the bank seal the safe deposit box until the auditors can count the securities at a subsequent date.1. A company had excess funds at the beginning of 2021. The investment committee decided to purchase marketable securities, the sale and acquisition of investments were delegated to a certain company official. The best person to make periodic reviews of the investments activity would be the: The investment committee Chief operating officer Treasurer Corporate controller 2. 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? Rights and obligations Occurence Completeness Valuation 3. The company holds bonds. The responsibility of the collection of interest and…
- 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.The following are selected portions of the report ofmanagement from a published annual report.REPORT OF MANAGEMENTManagement’s Report on Internal Control over Financial ReportingThe Company’s management is responsible for establishing and maintaining adequateinternal control over financial reporting. The Company’s internal control over financialreporting is a process designed under the supervision of its President and ChiefExecutive Officer and Chief Financial Officer to provide reasonable assurance regardingthe reliability of financial reporting and the preparation of the Company’s financialstatements for external reporting in accordance with accounting principles generallyaccepted in the United States of America. Management evaluates the effectiveness ofthe Company’s internal control over financial reporting using the criteria set forth bythe Committee of Sponsoring Organizations of the Treadway Commission (COSO)in Internal Control–Integrated Framework. Management, under the…In the normal course of performing their responsibilities,auditors often conduct audits or reviews of the following:1. Federal income tax returns of an officer of the corporation to determine whether heor she has included all taxable income in his or her return.2. Financial statements for use by stockholders when there is an internal audit staff.3. A bond indenture agreement to make sure a company is following all requirementsof the contract.4. Internal controls at a casino to ensure the casino is in compliance with federal andstate regulations.5. Computer operations of a corporation to evaluate whether the computer center isbeing operated as efficiently as possible.6. Annual statements for the use of management.7. Operations of the IRS to determine whether the internal revenue agents are usingtheir time efficiently in conducting audits.8. Statements for bankers and other creditors when the client is too small to have anaudit staff.9. Financial statements of a branch of the federal…
- Internal Control Questionnaire for Equity Investments. Cassandra Corporation, a manufacturing company, periodically invests large sums in marketable equity securities. The investment committee of the board of directors established the investment policy. The treasurer is responsible for carrying out the investment committee’s directives. All securities are stored in a bank safe deposit vault. Your internal control questionnaire with respect to Cassandra’s investments in equity securities contains the following three questions:1. Is investment policy established by the investment committee of the board of directors?2. Is the treasurer solely responsible for carrying out the investment committee’s directive?3. Are all securities stored in a bank safe deposit vault?Required:In addition to these three questions, what questions should your internal control questionnaire include with respect to the company’s investment in marketable equity securities?(Hint: Prepare questions to cover…Which of the following procedures would a CPA most likely perform in planning a financial statement audit?a. Make inquiries of the client’s lawyer concerning pending litigation.b. Perform cutoff tests of cash receipts and disbursements.c. Compare financial information with nonfinancial operating data.d. Recalculate the prior-years’ accruals and deferrals.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