The disclosure objective for the equity portion of the audit is said to be critical. Examine the partial balance sheet of Barron Co., a large, diversified financial services firm with 22,000 employees worldwide:

a. What are the deficiencies in this disclosure?

b. What further disclosures should be made in the footnotes?

c. How does the auditor go about auditing these disclosures for accuracy and completeness?

Transcribed Image Text:

Stockholder's Equity (000's omitted) Preferred Stock 6%, $100 par Add'l. Paid-in-Capital-Preferred Common Stock, $1 par Add'l. Paid-in-Capital-Common Retained Earnings Treasury Shares Receivable from Exercise of Stock Options $ 42,000 31,000 40,000 118,000 442,000 (9,000) (1,000) $663,000