Question: If a client is not deemed to have significant influence in an investee company, to obtain audit evidence to verify the investment balance, the auditor

If a client is not deemed to have “significant influence” in an investee company, to obtain audit evidence to verify the investment balance, the auditor should:

(a) review the audited accounts of the investee company.

(b) get an independent valuation of the assets and liabilities of the investee company.

(c) perform the audit of the investee company.

(d) obtain the market value of the investee company’s shares.

Step by Step Solution

★★★★★

3.45 Rating (161 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

d obtain th... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Auditing A Practical Approach Questions!

Q:

A loan of $3,000 for a new, high-end laptop computer is to be repaid in 15 end-of-month payments (starting one month from now). The monthly payments are determined as follows. What nominal and...

Q:

The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...

Q:

At 31 December 2010, Cinnamons shareholders equity on its balance sheet would most likely be: A. highest if Cinnamon is deemed to have control of Cambridge. B. independent of the accounting method...

Q:

The following descriptions, modified for teaching purposes, appear in the note disclosures for the City of Myrtle Beach, South Carolina, for the year ended June 30, 20X6: The Myrtle Beach Downtown...

Q:

The financial statements of The North West Company Inc. are presented in Appendix A at the end of this book. (a) Using the statement of earnings (statement of income), answer the following questions:...

Q:

I need to do this work. Income statement: determine gross profit, income from operations, and net income for the last two years. Comment on the increases or decreases in these amounts. Balance sheet:...

Q:

I need to do this work. Income statement: determine gross profit, income from operations, and net income for the last two years. Comment on the increases or decreases in these amounts. Balance sheet:...

Q:

Required: a) Calculate the current ratio, quick ratio, gross profit margin, profit margin, and debt to total assets for both years. Explain whether the ratios are improving or declining. b) Review...

Q:

help me out with these questions.. Income statement: determine gross profit, income from operations, and net income for the last two years. Comment on the increases or decreases in these amounts....

Q:

help me out with these questions.. Income statement: determine gross profit, income from operations, and net income for the last two years. Comment on the increases or decreases in these amounts....

Q:

help me out with these questions.. Income statement: determine gross profit, income from operations, and net income for the last two years. Comment on the increases or decreases in these amounts....

Q:

Tandy, Incorporated, was issued a charter on January 15, 2011, that authorized the following capital stock: Common stock , no-par, 103,000 shares Preferred stock, 9 percent, par value $8 per share,...

Q:

What is the redeeming characteristic of each of these award winners?

Q:

While debt financing is usually cheaper than equity financing, there is often an optimal level of debt - to - equity ratio beyond which increasing debt could lead to overall higher weighted average...

Q:

Warrant Value A warrant gives its owner the right to purchase three shares of common stock at an exercise price of $32 per share. The current market price of the stock is $39. What is the minimum...

Q:

What are the most important assertions for sales revenue? Compare these with the most important assertions for other revenue. Are they different? Explain.

Q:

Explain the techniques clients might deliberately use to violate the cut-off assertion because of pressure to meet sales targets. How might an auditor detect these actions?

Q:

Why is substantive testing of the processes impacting sales revenue usually kept to a minimum? How does the auditor gain sufficient assurance about these processes?

Q:

Outline of a business plan includes all of the following except: and why 1-Financial plan 2-Tactical plan 3-Introductory page 4-Production plan 5-Organizational plan

Q:

College Coasters is a San Diego - based merchandiser specializing in logo - adorned drink coasters. The company reported the following balances in its unadjusted trial balance at December 1 . \ table...

Q:

Locust Company purchased merchandise on account from a supplier for $7,900, terms 2/10, n/30. Locust Company returned $900 of the merchandise and received full credit. a. If Locust Company pays the...