A) Minutes of board of directors meetings.
B) Registrar's record of interbank transfers.
C) Canceled stock certificates.
D) Treasury stock certificate book.
A) Canceled (generally by perforation) and attached to the certificate book.
B) Destroyed to prevent fraudulent reissuance.
C) Retained by the selling shareholder.
D) Sent to the state's registrar of investment securities.
A) Perform analytical procedures on the bond prenumbered discount accounts.
B) Examine documentation of assets purchased with bond proceeds for liens.
C) Compare interest expense with the long-term debt amount for reasonableness.
D) Confirm the existence of individual long-term debt holders at year-end.
A) Comparing the book value of the debt to its year-end market value.
B) Vouching borrowing and repayment transactions.
C) Verifying the proper presentation of the debt through the use of confirmations.
Inspecting the accounts payable subsidiary ledger for unrecorded interest-bearing debt.
A) A small, nonpublic company.
B) A large, publicly traded company.
C) All companies must use this type of system.
D) No companies use this system anymore.
A) Individual holders of retired bonds.
B) Recomputation procedures performed using interest expense.
C) The bond trustee.
D) Comparisons of retired bonds with those outstanding.
A) The company utilizes the services of a bond trustee.
B) The company segregates approval from issuance of the bonds.
C) Bonds are countersigned by two officers.
D) Bonds are serially numbered.
A) Establish the completeness of recorded interest-bearing debt.
B) Establish the legality of outstanding debt.
C) Determine that debt is properly valued.
) Determine that the presentation and disclosure of interest-bearing debt is appropriate.
A) Examine all outstanding stock certificates for completeness.
B) Account for the proceeds from stock issues.
C) Reconcile shares outstanding with the general ledger.
D) Evaluate compliance with stock option plans.
A) List of audit objectives.
B) Decision table.
C) Summary of tests of controls.
D) Internal control questionnaire.
A) Accounts receivable.
B) Accounts payable.
C) Notes payable.
A) Confirmation with shareholders.
B) Inspection of certificates.
C) Inspection of cash receipts entries.
D) Recomputation of all gains and losses.
A) Copied and placed on the owners' equity lead schedule.
B) Copied and placed in the permanent file.
C) Confirmed with the transfer agent.
Ignored since they are not normally considered to be related to the internal control structure.
A) Stock certificates are prenumbered.
B) Stock certificates are signed immediately upon receipt from the printer.
C) Stock certificates are in the exclusive custody of a responsible officer.
D) Stock certificates require the signature of two officers.
A) The board of directors.
B) The audit committee.
C) The stockholders.
D) The president.