Problem

Which of the following is the most important audit consideration when examining the stockh...

Which of the following is the most important audit consideration when examining the stockholders’ equity section of a client’s balance sheet?

A. Changes in the capital stock account are verified by an independent stock transfer agent.

B. Stock dividends and stock splits during the year under audit were approved by the stockholders.

C. Stock dividends are capitalized at par or stated value on the dividend declaration date.

D. Entries in the capital stock account can be traced to resolutions in the minutes of meetings of the board of directors.

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