Answered: How does the audit of owners’ equity…

How does the audit of owners’ equity for a closely held corporationdiffer from that for a publicly held corporation? In what respects are there no significantdifferences?

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter17: Financial Statement Analysis

Section17.3: Horizontal Analysis

Problem 2AYU

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How does the audit of owners’ equity for a closely held corporation
differ from that for a publicly held corporation? In what respects are there no significant
differences?

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Which activities changes equity but does not affect a corporation's assets and liabilities?
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In the absence of restrictive provisions, what are the basicrights of stockholders of a corporation?
1. It refers to the capital of a corporation that cannot be withdrawn until final liquidation. 2. Those who compose the corporation whether shareholders or members or both. 3. This occurs when there is a change in the capital structure of the entity. 4. The residual interest of owners in the net assets of a corporation. 5. It is the earmarking of retained earnings for a certain purpose which may be legal, contractual or voluntary. choices:
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In establishing the existence and ownership of an investment held by a corporationin the form of publicly traded stock, an auditor should inspect the securities or(1) obtain written representations from management confirming that the securitiesare properly classified as trading securities.(2) inspect the audited financial statements of the investee company.(3) confirm the number of shares owned that are held by an independent custodian.(4) determine that the investment is carried at the lower of cost or market.
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