AUDIT+ASSURANCE SERVICES (LL) W/CONNECT
AUDIT+ASSURANCE SERVICES (LL) W/CONNECT
8th Edition
ISBN: 9781264979516
Author: LOUWERS
Publisher: MCG CUSTOM
Question
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Chapter 4, Problem 60EP

a.

To determine

Identify the distinction between management fraud and defalcation.

b.

To determine

State the responsibilities of auditor in detecting management fraud.

c.

To determine

State the characteristics of management fraud which audit team should consider based on auditing standards.

d.

To determine

Identify the factors that could raise concern of management fraud for auditors.

e.

To determine

Identify the circumstances which could lead to the disclosure of management’s fraud to other parties by the auditor?

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Hunger Games Corporation has had a defined benefit pension plan for three decades. Two years ago, the company improved the benefits at a cost of $2,800,000. Pension plan assets were $84,000,000 while pension obligations were $76,000,000 at the beginning of the year. For the current year, Hunger Games 's pension plan incurred current service cost of $6,400,000 and interest of $8,600,000. The pension's assets earned $9,000,000, which is $400,000 below expectations. There were no actuarial gains or losses for the year.    Required  Compute the pension expense for the year.   Record the journal entries for Hunger Games's pension plan.
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