When a client company does not maintain its own stock records, the auditor should obtain written confirmation from the transfer agent and registrar concerning:

Question

Quizplus · Accepted Answer

Choice "B" is correct. When a client company does not maintain its own stock records, the auditor should request the transfer agent and registrar to confirm the number of shares issued and outstanding. Choice "A" is incorrect. Restrictions on the payment of dividends should be in the board minutes, or possibly confirmed by the bank if the restrictions are due to outstanding loan(s). Choice "C" is incorrect. Guarantees of preferred stock liquidation value should be in the board minutes or the stock redemption agreement. Choice "D" is incorrect. The number of shares subject to agreements to repurchase should be in the board minutes and in any repurchase agreements.

When a Client Company Does Not Maintain Its Own Stock