- 4 Marks
Question
Future Prospects Company Ltd is a multinational company operating in Ghana. Its core operations include management of pension funds and real estate development. In preparing the financial statements, they carry out an appraisal of the pension funds to assess its ability to pay benefits to contributors. Periodic revaluation of lands and buildings was also carried out.
Required:
In respect of valuation of pension funds, future payments to beneficiaries, and revaluation of properties, name two auditor’s experts on whom possible reliance will be placed during your audit of the company and the work each may perform.
(4 marks)
Answer
- Actuary: For the valuation of pension funds, an actuary can be relied upon to provide audit evidence regarding the viability and adequacy of the pension scheme’s funding and future payments to beneficiaries.
- Valuer: For the revaluation of landed properties, a valuer can be relied upon to provide accurate assessments of the value of properties, ensuring that the revaluations are consistent with market conditions and appropriate accounting standards.
(2 marks for each expert – 4 marks total)
- Tags: Auditor's Experts, Expert Reliance, Pension Funds, Property Revaluation, Valuation
- Level: Level 2
- Topic: Audit and Assurance Evidence
- Series: NOV 2020
- Uploader: Dotse