Which audit procedure is most closely related to management's assertions about the presentation of stockholders' equity?
A)Determining whether restrictions have been imposed on retained earnings.
B)Counting treasury stock certificates.
C)Inspecting minutes of the board of directors to verify that cash dividends were declared.
D)Establishing that treasury stock is valued at cost.

Question

Quizplus · Accepted Answer

Determining whether restrictions have been imposed on retained earnings is directly related to the presentation of stockholders' equity, as it affects how equity is reported and disclosed in the financial statements.

Which Audit Procedure Is Most Closely Related to Management's Assertions