Which of the following controls would a company most likely use to safeguard marketable securities when an independent trust agent is not employed?

Choice "b" is correct. Joint custody by two company officials over assets like cash and marketable

securities helps safeguard the assets. Under joint custody, collusion is required for a defalcation to

occur.

Choice "a" is incorrect. Review of investment decisions made by the treasurer might reduce the

probability of poor investment policies, but would not be likely to safeguard marketable securities

after purchase.

Choice "c" is incorrect. Tracing purchases and sales from the subsidiary ledger to the general ledger

would help ensure that all existing securities are recorded in the financial statements, but would not

help safeguard marketable securities.

Choice "d" is incorrect. An annual count by the chairman of the board might provide a small

safeguard, but the infrequent performance of the control makes it a fairly weak one.