Keys, Inc., compared the cost of its marketable securities to their market value at the end of

Question:

Keys, Inc., compared the cost of its marketable securities to their market value at the end of 2010. This comparison follows:

Management would like to classify these securities as available- for- sale and, therefore, report the unrealized loss on the statement of shareholders€™ equity rather than the income statement. How should the auditor decide if the securities are €œtrading€ or €œavailable- for- sale€? What are the advantages and disadvantages of reporting unrealized losses on the statement of shareholders€™ equity rather than the in-come statement? How will the various stakeholders be affected by this decision?

Stakeholders
A person, group or organization that has interest or concern in an organization. Stakeholders can affect or be affected by the organization's actions, objectives and policies. Some examples of key stakeholders are creditors, directors, employees,...