Which of the following results in a situation where an auditor has the least amount of difficulty in determining stock valuation?
A)When stock is issued for land.
B)When stock is exchanged for another business.
C)When stock options are issued and exercises occur.
D)When stock is issued for cash.

Question

Quizplus · Accepted Answer

When stock is issued for cash, the auditor has an easier time determining the stock valuation because the value of cash is already established and easily verifiable. In the other scenarios, such as when stock is issued for land or exchanged for another business, there may be more difficulty in determining the fair value of the assets being exchanged. When stock options are issued and exercises occur, it can also be challenging to determine the fair value of the stock options and the underlying stock.

Which of the Following Results in a Situation Where an Auditor