Auditing and Assurance Services, Student Value Edition (16th Edition)
Auditing and Assurance Services, Student Value Edition (16th Edition)
16th Edition
ISBN: 9780134075754
Author: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan
Publisher: PEARSON
Question
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Chapter 13, Problem 35C

Part I a.

To determine

Identify the activity that will be done for reducing control risk approach and substantive approach.

Part I b.

To determine

Explain the advantagesof reducing control risk approach Person RS planned to used

have over the substantive approach previously used in the audit of Company MP.

Part I c.

To determine

Explain the advantages of substantive approach over the reducing control riskapproach.

Part IIa.

To determine

Describe the meaning of 0.17 in audit.

Part II b.

To determine

Calculate Planned Detection Risk (PDR) assuming that Person RS had assessed control risk at 100% and all otherrisks as they are stated.

Part IIc.

To determine

Describe the effect of the answer in requirement b. on the planned audit proceduresand sample size in the audit of inventory compared with the .17 calculated by Person RS.

Part III.

To determine

Explain whether the revised judgements of staff person on the effect of tests controlson planned substantive tests and also explain the nature basis of any disagreement. Explain the implicationsof the results on the auditor’s internal control report if auditor B issued a report on internal control over financial reporting.

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Prepare the journal entries to account for the defined benefit pension plan in the books of Flagstaff Ltd for the year ended December 31 2020 and the pension table for the following pic.
Additional information(a) All contributions received by the plan were paid by Flagstaff Ltd.(b) The interest rate used to measure the present value of the defined benefitobligation was 9% at 31 December 2019 and 31 December 2020.(c) The asset ceiling was nil at 31 December 2019 and 31 December 2020.   Calculate the actuarial gain or loss for the defined benefit obligation for 2020 Calculate the return on plan assets, excluding any amount recognized in net interest for2020
Additional information(a) All contributions received by the plan were paid by Flagstaff Ltd.(b) The interest rate used to measure the present value of the defined benefitobligation was 9% at 31 December 2019 and 31 December 2020.(c) The asset ceiling was nil at 31 December 2019 and 31 December 2020. Questiona) Determine the surplus or deficit of Flagstaff Ltd.’s defined benefit plan at 31 December2020 and determine the net defined benefit asset or liability that should be recognized by FlagstaffLtd at 31 December 2020 b) Calculate the net interest for 2020
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