Question

When there is a large number of negotiable securities in multiple locations, careful planning of the physical inspection and count of the securities by the auditor is necessary to guard against

A. Unauthorized negotiation of the securities before they are counted
B. Unrecorded sales of securities after they are counted
C. Substitution of securities already counted at one location for other securities which should be on hand at a different location but are not
D. Substitution of authentic securities with counterfeit securities

Answer 1

Careful planning of the physical inspection and count of the securities by the auditor is necessary to guard against unauthorized negotiation, unrecorded sales, and substitution of securities. So, the correct answer is option d.

Step-by-step explanation:

When there is a large number of negotiable securities in multiple locations, careful planning of the physical inspection and count of the securities by the auditor is necessary to guard against unauthorized negotiation of the securities before they are counted, unrecorded sales of securities after they are counted, substitution of securities already counted at one location for other securities which should be on hand at a different location but are not, and substitution of authentic securities with counterfeit securities. So, the correct answer is option d.