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You are the auditor in char of investments, you have just been given the following list of securities held by Circle Corporation at December 31, 20X3. CIRCLE CORPORATION Schedule of Marketable Securities December 31, 20X3

You are the auditor in char of investments, you have just been given the following list of securities held by Circle Corporation at December 31, 20X3. CIRCLE CORPORATION Schedule of Marketable Securities December 31, 20X3

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject: auditing and assurance concepts and applications

234 Chapter 7 Exercise 2 You are the auditor in charge of the audit of Circle Corporation. In the audit of investments, you have just been given the following list of securities held by Circle Corporation at December 31, 20X3. CIRCLE CORPORATION Schedule of Marketable Securities December 31, 20X3 10,000 shares of Diamond Corp. 6,000 shares of Square Corp. 8,000 shares of Rectangle Corporation 400 Line Corporation 7.5% Convertible Bonds Market Value December 31 P599,100 216,500 (not publicly traded) 555,000 Required: 1. Identify the potential audit problems that may be indicated by the schedule. 2. To value the shares of Rectangle Corporation, management has employed a securities valuation firm. Explain the audit considerations involved in auditing the value developed by the valuation firm. Exercise 3
Transcribed Image Text:234 Chapter 7 Exercise 2 You are the auditor in charge of the audit of Circle Corporation. In the audit of investments, you have just been given the following list of securities held by Circle Corporation at December 31, 20X3. CIRCLE CORPORATION Schedule of Marketable Securities December 31, 20X3 10,000 shares of Diamond Corp. 6,000 shares of Square Corp. 8,000 shares of Rectangle Corporation 400 Line Corporation 7.5% Convertible Bonds Market Value December 31 P599,100 216,500 (not publicly traded) 555,000 Required: 1. Identify the potential audit problems that may be indicated by the schedule. 2. To value the shares of Rectangle Corporation, management has employed a securities valuation firm. Explain the audit considerations involved in auditing the value developed by the valuation firm. Exercise 3
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