Auditing and Assurance Services 1st Edition by Iris Stuart

Exercise 23

In establishing the existence and ownership of an investment held by a corporation in the form of publicly traded stock, an auditor should inspect the securities or
a. Obtain written representations from management confirming that the securities are properly classified as trading securities.
b. Inspect the auditor's 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 of market.