preview

Acct 336 Week 4 Paper

Decent Essays

1. The first procedure an auditor could use is completeness testing. This is used to make sure the auditor has all information he or she would need to accomplish the task they have been given. A second procedure that could be used is classification. This is when information given must be clarified to the auditor. This would be needed for this circumstance when there was no clear answer given as to why GM chose the 6.75 discount rate. Another procedure that should be used is verification, this is when an auditor verifies that the completed records given to him occurred. A fourth procedure is existence. An auditor should verify that the company has existing investments that our meeting the objectives of the pension plan. A final action that should be taken is clarifying the objectives of the pension plan to ensure it is on the correct track for employee retirement benefits. (http://www.accaglobal.com/content/dam/acca/global/PDF-students/2012s/sa_nov12_f8_fau_audit_procedures.pdf) 2. …show more content…

PCAOB AU 336 states that an auditor is expected to be knowledgeable about business matters in general, but cannot be expected to be an expert in all professions. This means when information outside of the auditors expertise needs to be gathered or interpreted a specialist can be hired. PCAOB AU 336 gives an example of valuation of art. An accountant cannot be expected to be able to tally up a company’s works of art as an asset and would need to hire someone who specializes in that field. An expert an accountant could seek out is a pension plan administrator who knew how the plan ran. The admin could get the accountant information like how much the plan should be expected to have funded to pay out to all employees as necessary.

Get Access