When conducting the audit of stockholders' equity, it is normal practice to verify all capital stock transactions
A) only when the client is small.
B) that are in excess of a material amount.
C) if there aren't very many during the year.
D) regardless of the controls in existence, because of their materiality and permanence in the records.

Question

Quizplus · Accepted Answer

The audit of stockholders' equity requires verification of all capital stock transactions regardless of the controls in existence because they are material and permanent in the records. Even small discrepancies in capital stock transactions can significantly impact a company's financial statements. Therefore, auditors should thoroughly examine and verify all capital stock transactions.

When Conducting the Audit of Stockholders' Equity, It Is Normal