You are the auditor in charge of the audit of Steffens Corporation. In the audit of investments, you have just been given the following list of securities held by Steffens Corporation at December 31, 20X3.

a. Identify the potential audit problems that may be indicated by the schedule.

b. To value the shares of Beta Corporation, management has employed a securities valuation firm. Explain the audit considerations involved in auditing the value developed by the valuation firm.

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STEFFENS CORPORATION Schedule of Marketable Securities December 31, 20X3 Market Value December 31 10,000 shares of Microsoft Corp. 6,000 shares of General Motors Corp. 8,000 shares of Beta Corporation $521,000 194,000 (not publicly traded) 361,000 400 Hilton 5% Convertible Bonds