For a corporation that does not utilize the services of an independent registrar and stock transfer agent,which of the following represents a weakness in internal control over stock issuance?

Question

Quizplus · Accepted Answer

Signing stock certificates immediately upon receipt from the printer represents a weakness in internal control over stock issuance because it increases the risk of fraudulent issuance or unauthorized transfer of stock. A better control would be to ensure that the certificates are properly reviewed and authorized before they are signed and issued. The other choices represent good controls over stock issuance. Pre-numbers ensure that stocks are accounted for, custody of stock certificates ensures their safekeeping, and requiring two signatures adds an additional level of authorization and oversight.

For a Corporation That Does Not Utilize the Services of an Independent