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XYZ Company Has Investment Securities Held by a Broker

Question 98

Matching

XYZ Company has investment securities held by a broker. An auditor is reviewing the last broker's statement for the year. For each of the tests , select the ASB balance assertion listed in A-D that the auditor is testing.

Premises:

Responses:

Verified the name on the account was the company's name.

Rights and obligations

Vouched items listed on the statement to the investment account.

Completeness

Vouched purchases listed on the statement by authorization by senior management or the board of directors.

Valuation or Accuracy

The auditor has received a letter of confirmation directly from the broker for investments listed on the statement.

Existence

The auditor compared the price of the securities listed on the broker's statement with the price listed on that day in The Wall Street Journal to the price used to record the investment on the balance sheet.

Premises:

Verified the name on the account was the company's name.

Vouched items listed on the statement to the investment account.

Vouched purchases listed on the statement by authorization by senior management or the board of directors.

The auditor has received a letter of confirmation directly from the broker for investments listed on the statement.

Responses:

Rights and obligations

Completeness

Valuation or Accuracy

Existence

Correct Answer:

Premises: