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Dear Mika,
I have several questions:1. Do I need to remember the names of ISAs to refer them during the exam?
2. Every time the opinion is modified for any reason can the auditors choose to raise the issue at the AGM.
3. When a pension plan is in deficit and it is not recognised, will the required adjustment be
DR Expense?
CR ObligationHi Hermine (my name is Mike!)
No, you do NOT need to remember neither names nor numbers of ISAs (nor IASs nor IFRSs) there are NO marks for being able to quote a title nor a number. It’s an auditing exam, not a memory test
The attenders at an AGM may discuss any point at all that is on the agenda of the AGM and, since the presentation of the financial statements and then auditors’ report on those statements is always on the agenda of an AGM, the members may discuss it – whether or not it is modified
As auditors, it is not our right to make any adjustments. The correct entry to record such an increase in the obligation would be to debit employee costs and credit the pension fund obligation, but that entry is for the entity to make, not the auditors
OK?
Thank you very much for your answers.
With the first 2 points everything is clear.
As to the third question, I realise that the adjustment is not the responsibility or the right of the auditor, I simply want to know whether debit record is an expense as in one of answers to exam kit questions it seems that it is not an expense.
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