Chapter 15

Bond transactions are usually confirmed directly with the bond holders

a. true

b.false

It is important to trace the disposition of collateral that was used to secure notes as they can be diverted by an unauthorized user when they are returned.

a. true

b.false

Most of the work involved in the audit of long-term debt can be accomplished in advance of the balance sheet date.

a.true

b.false

All cancelled stock certificates should be destroyed to prevent their being issued again in the future

a. true

b.false

the audit plan for long-term debt normally does not provide for the usual distinction between tests of controls and substantive procedures.

a.true

b.false

All of the following are considered part of the audit of capital stock except.

a. determine the number of shares of treasure stock that the company owns

b. direct confirmation of number of shares held with shareholders

c. determine that all dividends were properly authorized and paid

d. account for the proceeds from new stock issues