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Stock Issuance Risk Control Procedures

The document outlines potential risks associated with stock issuance and management, including failures in verification, record-keeping, and the handling of canceled stock certificates. It provides control procedures to mitigate these risks, such as reviewing Board minutes, ensuring proper financial disclosures, and conducting regular audits. The emphasis is on maintaining accurate stock records and preventing unauthorized reissuance of canceled certificates.

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Joefrey Pujadas Baluma
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5 views1 page

Stock Issuance Risk Control Procedures

The document outlines potential risks associated with stock issuance and management, including failures in verification, record-keeping, and the handling of canceled stock certificates. It provides control procedures to mitigate these risks, such as reviewing Board minutes, ensuring proper financial disclosures, and conducting regular audits. The emphasis is on maintaining accurate stock records and preventing unauthorized reissuance of canceled certificates.

Uploaded by

Joefrey Pujadas Baluma
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

WHAT CAN GO WRONG (RISK) CONTROL PROCEDURE

1.) Stock registrar may fail to verify that stock is 1.) Obtain and review Board of Directors minutes
issued in accordance with the authorization of of meetings, shareholders meetings,
BOD and the articles of incorporation. committee meetings, and articles of
2.) Canceled stock certificates are not defaced. incorporation.
3.) No independent stock transfer agents are 2.) Ensure proper disclosure in the financial
employed and the corporation issues its own statement of the number of shares issued
stock and maintains stock records. and fully paid, shares authorized, outstanding
4.) Stock transfer agents may not maintain a share beginning and end of the period, and
detailed stockholders records and may not carry par value per share.
out transfer of stock ownership. 3.) Canceled stock certificates should be defaced
5.) Not updated amounts in loans like the interest to prevent reissuance and from reentering
rates and repayment period into the accountant the market again. Furthermore,
or system that keeps the record. corresponding stubs should be attached in
defacing.
4.) Obtain and verify equity reconciliation, obtain
a copy of the latest articles of incorporation,
and obtain a schedule of the share capital to
ensure the accuracy of stock records.
5.) Auditing should be performed monthly and
annual basis to perform adjustments and
keep everything in track.

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