The Securities and Exchange Commission: Multiple Choice verifies the accuracy of the information contained in the prospectus. publishes red herrings on prospective new security offerings. examines the prospectus during the Green Shoe period. reviews registration statements to ensure they comply with current laws and regulations.

The Securities and Exchange Commission: Multiple Choice verifies the accuracy of the information contained in the prospectus. publishes red herrings on prospective new security offerings. examines the prospectus during the Green Shoe period. reviews registration statements to ensure they comply with current laws and regulations.

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter16: Advanced Topics Concerning Complex Auditing Judgments

Section: Chapter Questions

Problem 25MCQ

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The issue of security througha number of processes .once the SEC has commented to interest on the registration statement and a preliminary prospectus has been distributed to interest invetors,the investment bankers organizeroad shows and undertake book building in the process. Required: Explain the meaning and two [2]purposes of road showa as used in the preamble above.
MC Qu. 41-05 Which of the following describes... Which of the following describes a prospectus? Multiple Choice A prospectus is an oral promise that assures the buyer of the veracity of the information in the registration statement. A prospectus an advertising tool that issuers distribute to potential investors. A prospectus is a document that describes the securities offered for sale and the SEC's approval of those securities. A prospectus is a collection of all of the company's financial documents. APR 27 A AW rave X
The auditors should insist that a representative of the client be present during the inspection and count of securities toa. Lend authority to the auditors’ directives.b. Detect forged securities.c. Coordinate the return of all securities to proper locations.d. Acknowledge the receipt of securities returned.
Requirement: Indicate where management assertions are being validated by the below substantive auditprocedures. Existence/Occurrence(E/O) Rights &obligations(R/O) Completeness(C) Valuation andallocation/Accuracy(V/A) Presentation& disclosure(P/D) a. Inspect securities on handand confirm securitiesheld by custodian.b. Trace serial numberindicated in the securityto the list of investmentsecurities maintained bythe client.c. The investment securitieslisted on the schedule ofinvestment transactionsof the client aremathematically accurateand agree with thegeneral ledger.d. Read minutes of meetingof board of directorsregarding investmentsused as collateral forborrowings.e. Recalculate gains andlosses on sale ofsecurities.f. Recalculate interest anddividend revenues.g. Inspect securitiessimultaneously with countof other liquid assets.h. Verify fair values ofsecurities with publishedprice quotations.i. Obtain an understandingon management’s processin classifying…
Substantive audit procedures Existence/Occurrence(E/O) Rights &obligations(R/O) Completeness(C) Valuation andallocation/Accuracy(V/A) Presentation& disclosure(P/D) a. Inspect securities on handand confirm securitiesheld by custodian. b. Trace serial numberindicated in the securityto the list of investmentsecurities maintained bythe client c. The investment securitieslisted on the schedule ofinvestment transactionsof the client aremathematically accurateand agree with thegeneral ledger. d. Read minutes of meetingof board of directorsregarding investmentsused as collateral forborrowings. e. Recalculate gains andlosses on sale ofsecurities. f. Recalculate interest anddividend revenues. g. Inspect securitiessimultaneously with countof other liquid assets. h. Verify fair values ofsecurities with publishedprice quotations. i. Obtain an understandingon management’s processin classifying…
In performing risk assessment procedures for investments, an auditor may inquire of the client personnel which of the following questions? a. Are investment securities acquisitions and disposals properly authorized by the board of directors? b. Is access to investment securities restricted to at least two authorized officials? c. All of the choices. d. Are the duties of authorization, custody, recording keeping and valuation of investment securities transactions segregated?
The underwriter of a securities offering may request that an auditor perform specified procedures and supply certain assurances concerning unaudited information contained in a registration statement. The auditor's response to such a request is commonly called a:
Following are typical questions that might appear on an internal control questionnaire for investments in marketable securities. Is custody of investment securities maintained by an employee who does not maintain the detailed records of the securities? Are securities registered in the company name? Are investment activities reviewed by an investment committee of the board of directors? Describe the manner in which each of the above procedures might be tested.
Following are typical questions that might appear on an internal control questionnaire for investments in marketable securities. Is custody of investment securities maintained by an employee who does not maintain the detailed records of the securities? Are securities registered in the company name? Are investment activities reviewed by an investment committee of the board of directors? Describe the purpose of each of the above controls.
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You were assigned to audit the bond investments of ABCcompany. The company maintains the records and custody of its certificates, thus you have decided to conduct a count of securities to test the existence assertion. You have asked that a person from ABCcompany should accompany you during the count. Why is this important? Group of answer choices To detect fraudulent securities So that the company representative may assist you during the count To acknowledge any variances during the inspection. So that the inspection of securities will be conducted in an efficient manner.