To establish the existence and ownership of a long-term investment in the common stock of a publiclytraded company, an auditor ordinarily performs a security count or:

Question

Quizplus · Accepted Answer

Choice "B" is correct. Auditors obtain a confirmation (safekeeping list) indicating the number of shares of stocks held by an outside independent custodian. Choice "A" is incorrect. Even a good system of internal control does not necessarily provide sufficient evidence of existence and ownership. Choice "C" is incorrect. Verifying the market price doesn't provide evidence regarding ownership or existence. Choice "D" is incorrect. Confirmations are generally sent to the independent custodian, not to the issuing company.

To Establish the Existence and Ownership of a Long-Term Investment