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Trouble with documentation The following questions are commonly found in internal control questionnaires used by auditors to obtain an understanding of internal control over stockholders'
Trouble with documentation
The following questions are commonly found in internal control questionnaires used by auditors to obtain an understanding of internal control over stockholders' equity. In using the questionnaire for a client, a "YES" response indicates a possible internal control, while a "NO" answer indicates a potential weakness QUESTIONS COMMONLY FOUND IN INTERNAL CONTROL QUESTIONNAIRE FOR AUDIT OF STOCKHOLDERS' EQUITY (a) Does the company use the services of an independent registrar or transfer agent? (b) Are issues and retirements of stock authorized by the board of directors? (c) If an independent registrar or transfer agent are not used: (1) (2) Are unissued certificates properly controlled? Are canceled certificates mutilated to prevent their reuse? (d) Are common stock master files and stock certificate books periodically reconciled with the (e) Is an independent transfer agent used for disbursing dividends? If not, is an imprest (f) Are all entries in the stockholders' equity accounts authorized at the proper level in the general ledger by an independent person dividend account maintained? organization? REQUIRED: () For each of the questions listed, indicate the purpose of the control. each of the questions listed, indicate the type of potential financial statement error or fraud that could occur if the control is not in effect For each of the potential errors or fraud indicated in (2) above, list a specific audit procedure that the auditor can use to determine whether a material error or fraud has occurred. (2) For (3) Step by Step Solution
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