You have been assigned to examine the "Long-term Investments" account of the Richard Company, a new audit client of your firm, for the current year. The client's records show an investment of \(\$ 75,000\) for 750 shares of the common stock of one of its major suppliers of raw materials. This amount is approximately 8 percent of your client's total current assets. You learn that the supplier has 15,000 shares of common stock issued and outstanding. The supplier does not publish financial statements for the general public and its stock has no recently quoted market value.

As a part of your audit of the long-term investment account, you examine the stock certificate for 750 shares, the paid check for \(\$ 75,000\) issued for this stock, and determine that the transaction was approved by your client's board of directors.

Required:

a. Have you accumulated sufficient, competent evidence for this account? Explain.

b. Identify any additional auditing procedures that should be performed.