If the auditor wants to obtain evidence as to whether the dividend payment was made to the stockholders who owned the stock as of the dividend record date,which of the following would the auditor do?
A)Recalculate the dividends per share.
B)Examine the minutes of the board of directors' meetings for authorization.
C)Trace the payee's name on the canceled check to the dividend records.
D)Determine that dividend restrictions are adequately disclosed in the financial statements.

Question

Quizplus · Accepted Answer

To obtain evidence as to whether dividend payment was made to the stockholders who owned the stock as of the dividend record date, the auditor would trace the payee's name on the canceled check to the dividend records. This would allow the auditor to ensure that the dividend payment made to the shareholders was made to the right person at the right time. Recalculating the dividends per share, examining the minutes of the board of directors' meetings for authorization, or determining that dividend restrictions are adequately disclosed in the financial statements would not provide sufficient evidence regarding whether dividend payments were made to the correct shareholders.

If the Auditor Wants to Obtain Evidence as to Whether