Final answer:
In establishing the existence and ownership of a long-term investment in publicly-traded stock, an auditor should inspect the securities or correspond with the investee company, inspect the audited financial statements, confirm the number of shares held by an independent custodian, and determine the investment's carrying value.
Step-by-step explanation:
In establishing the existence and ownership of a long-term investment in publicly-traded stock, an auditor should inspect the securities or
- A. Correspond with the investee company to verify the number of shares owned
- B. Inspect the audited financial statements of the investee company
- C. Confirm the number of shares owned that are held by an independent custodian
- D. Determine that the investment is carried at the lower of cost or market
In order to establish the existence and ownership of a long-term investment in publicly-traded stock, an auditor may employ multiple procedures. These procedures can include corresponding with the investee company to verify the number of shares owned, inspecting the audited financial statements of the investee company, confirming the number of shares owned that are held by an independent custodian, and determining that the investment is carried at the lower of cost or market.