You are engaged in doing the audit of a corporation whose records have not previously been audited by you. The corporation has both an independent transfer agent and a registrar for its capital stock. The transfer agent maintains the record of stockholders and the registrar checks that there is no overissue of stock. Signatures of both are required to validate certificates.

It has been proposed that confirmations be obtained from both the transfer agent and the registrar as to the stock outstanding at balance-sheet date. If such confirmations agree with the books, no additional work is to be performed as to capital stock.

Required:
If you agree that obtaining the confirmations as suggested would be sufficient in this case, give the justification for your position. If you do not agree, state specifically all additional steps you would take and explain your reason for taking them.