Professional Documents
Culture Documents
1 FALSE The auditor's use of the work of an auditor's expert does not reduce the responsibility of the auditor on the audit opinion expressed
2 FALSE Auditor's expert is used by the auditor to assist the auditor in obtaining sufficient appropriate evidence.
3 FALSE Not a management's expert
4 TRUE
5 FALSE Capability relates to the ability of the management's expert to exercise competence in the circumstances
6 FALSE Difference between an outcome of an accounting estimate and amount recognized in a financial statements is not necessarily a misstatement
7 TRUE
8 TRUE
9 FALSE Not all assumptions should be identified by the expert
10 FALSE Retrospective review of management's judgments and assumptions related to significant accounting estimates
11 TRUE
12 TRUE
13 TRUE
14 TRUE
15 TRUE
16 TRUE
17 FALSE Audit sampling is an efficient procedure for large populations.
18 TRUE
19 FALSE If the audit procedure is not applicable to the selected item, replace the sample.
20 FALSE The lower the risk, the higher the sample size
PROBLEM 1: DEE CORPORATION
Fair Value of Plan Assets Present Value of Benefit Obligation
January 1 7,000,000.00 7,500,000.00
Current Service Cost 1,400,000.00
Actual Return on Plan Asset 840,000.00
Contribution to the Plan 1,200,000.00
Benefits paid to the retirees - 1,500,000.00 - 1,500,000.00
Decrease due to change in actuarial assumption - 200,000.00
Present value of additional defined benefit obligation settled - 500,000.00
Settlement price of additional defined benefit obligation - 400,000.00
Interest expense 750,000.00 (10% X 7,500,000)
December 31 4) 7,140,000.00 5) 7,450,000.00
Remeasurement Gain/Loss:
Actual Return on Plan Asset 840,000.00
Interest Income - 700,000.00
Decrease due to change in actuarial assumption 200,000.00
Recorded in Other Comprehensive Income 3) 340,000.00 GAIN
PROBLEM 3
Cost of Investment 6,000,000.00
Investment income (2022) 13) 1,400,000.00
Unrealized profit (downstream) - 200,000.00
Investment in Associate as of December 31, 2022 14) 7,200,000.00
Investment income (2023) 15) 2,000,000.00
Realized profit (downstream) 200,000.00
Investment in Associate as of December 31, 2023 16) 9,400,000.00
PROBLEM 4
No amount to be recognized in Profit & Loss.
Note: Realized holding gains/losses and disposal gains/losses are recognized in Other Comprehensive Income for Financial Assets designated at fair value through Other Comprehensive Income
The entity has the discretion to recycle the gains and losses to retained earnings but will not pass through the income statement for equity securities.
PROBLEM 5
June 1 Selling Price (Total) 3,900,000.00
Less: Cost of Shares 2,910,000.00 Purchase cost includes dividends should be received by seller
990,000.00
November 20 Selling Price (Total) 3,400,000.00 Selling price includes dividends should be received by the entity
Less: Cost of Shares 3,000,000.00
400,000.00
Investment at FVPL:
Remaining shares as of December 31, 2020 30,000.00
Multiply by: Fair value as of December 31, 2020 190
Investment balance as of December 31, 2020 20) 5,700,000.00