Zion Wilderness,Inc.is a public company that does not maintain its own stock books.How will the auditor most likely establish the number of shares outstanding for testing purposes?
A)Inquiry of management.
B)Discussions with the stock trustee.
C)Confirmation with the transfer agent.
D)Examination of proceeds from current stock issuance.

Question

Quizplus · Accepted Answer

The most likely way for the auditor to establish the number of shares outstanding for testing purposes is to confirm with the transfer agent, who is responsible for maintaining records of stock and stock transactions. The auditor may also inquire of management or examine proceeds from current stock issuance, but these are not as reliable as confirmation with the transfer agent. Discussions with the stock trustee may also be helpful, but not necessary in this case, as the transfer agent should have the most up-to-date and accurate information regarding shares outstanding.