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1. Internal control measures regarding the issuance of share certificates and proper accounting for
transfers and registration of shares should be established. One of these measures is the appointment of a
share and transfer agent or an independent registrar.
2. Share certificates should be serially prenumbered by the printer and that the authority for signing and
issuing the certificates be designated by the board of directors.
3. As individual certificates are issued, corresponding records of the certificates should be prepared
containing the name and address of the shareholders and the number of shares issued to each.
4. Cancelled certificates should be mutilated and any necessary documentary stamps should be attached
to the cancelled certificates.
5. Entries for the share issuances and transfers should be made by a person who does not have authority
to sign and issue certificates.
Rights and obligations: the entity has the authority to execute the shareholder's equity transactions
7. Review articles of incorporation and by laws.
8. Make inquiries of legal counsel.
Valuation and allocation: Shareholder's equity balances are shown at appropriate amounts
9. Vouch share capital entries, dividend entries and entries to retained earnings.
Presentation and disclosure: Shareholder's equity accounts are properly presented and adequately
disclosed in the financial statements.
10. Review financial statements and perform analytical procedures to determine whether accounts are
classified and disclosed int he financial statements in accordance with GAAP.
11. Review minutes of board of directors' and shareholders' meetings for share options and dividend
restrictions.
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