Following are selected questions from an internal control questionnaire relating to a companys debt and equity transactions. A YES response to any question indicates a potential strength of the system, and a NO response indicates a potential weakness.

(a) Are all long-term debt and other borrowings authorized by the board of directors?

(b) Is an officer responsible for determining whether all debt covenants are complied with?

(c) Are unissued bonds and notes prenumbered consecutively and controlled by an official independent of recording of transactions related to these items?

(d) Are interest payments and accruals recalculated periodically?

(e) Are unissued stock certificates prenumbered consecutively and safeguarded?

(f) Are treasury shares adequately controlled and accounted for?

(g) Are dividend payments and accruals recalculated periodically?

REQUIRED: Assume that inquiries indicate the answer is YES to each of the above questions. For each of the above items, provide one specific test of controls that the auditor can perform in order to provide persuasive evidence that the answer provided is accurate. Be sure that the procedure is detailed enough in language so that it is clear what the auditor must do to execute the procedure.