Customer accounts: Ensure that the firm is exercising due diligence in the opening and supervision of customer accounts. The procedures should be formalized in writing and in accordance with the rules and regulations of the appropriate regulatory authority. Ensure that daily customer positions and option exercises are in accordance with the limits established by the appropriate exchange. Verify that commissions generated by customer trades are properly calculated and posted to the general ledger.

Question

Quizplus · Accepted Answer

The opening and supervision of customer accounts is a primary audit objective of stock and options because it ensures that the firm is complying with regulatory requirements and properly managing its customer accounts, positions, and commissions. This objective may not apply to swaps or bonds, which have different requirements and risks.

Customer Accounts: Ensure That the Firm Is Exercising Due Diligence