Response to the following problem:
Cassandra Corporation, a manufacturing company, periodically invests large sumsin investment (debt and equity) securities. The investment policy is established by the investment committee of the board of directors, and the treasurer is responsible for carrying out the investment committee's directives. All securities are stored in a bank safe-deposit vault.
The independent auditor's internal control questionnaire with respect to Cassandra's
investments in debt and equity securities contains the following three questions:
· Is investment policy established by the investment committee of the board of directors?
· Is the treasurer solely responsible for carrying out the investment committee's directives?
· Are all securities stored in a bank safe-deposit vault?
Required:
In addition to these three questions, what questions should the auditor's internal control questionnaire include with respect to the company's investments in debt and equity securities?