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Key Audit Matter Our Response: Defined Benefit Obligation

The key audit matters included: 1) Defined benefit obligation - The valuation of retirement schemes considers actuarial assumptions like discount rates and mortality rates. Small changes can materially impact obligations. Senior management reviewed assumptions and controls. 2) Warranty provision - The company estimates warranty provisions when selling products based on historical claims data. This estimate considers data elements in a warranty spreadsheet and internal/external factors impacting claims. 3) Revenue recognition - Revenue is recognized when control transfers. The timing of transfers was tested for a sample of sales contracts by examining terms and delivery documentation.

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31 views1 page

Key Audit Matter Our Response: Defined Benefit Obligation

The key audit matters included: 1) Defined benefit obligation - The valuation of retirement schemes considers actuarial assumptions like discount rates and mortality rates. Small changes can materially impact obligations. Senior management reviewed assumptions and controls. 2) Warranty provision - The company estimates warranty provisions when selling products based on historical claims data. This estimate considers data elements in a warranty spreadsheet and internal/external factors impacting claims. 3) Revenue recognition - Revenue is recognized when control transfers. The timing of transfers was tested for a sample of sales contracts by examining terms and delivery documentation.

Uploaded by

gs randhawa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Key

Audit Our Response


Matter

We have examined the key c


member data, formulation of
process in arriving at the prov
the controls for determining th
Defined benefit obligation of those assumptions by seni
The valuation of the retirement benefit schemes in the Company is controls were designed, imple
determined with reference to various actuarial assumptions therefore determined that we
2. including discount rate, future salary increases, rate of inflation, controls for the purposes of o
mortality rates and attrition rates. Due to the size of these We tested the employee data
schemes, small changes in these assumptions can have a material where material, we also cons
impact on the estimated defined benefit obligation settlements, past service cos
any other amendments made
evidence obtained, we found
management in the actuarial
obligations to be appropriate.

We understood and tested th


Warranty Provision
in arriving at the warranty pro
The Company makes an estimated provision for assurance type
3. data elements with provision
warranties at the point of sale. This estimate is based on historical
the warranty spread sheet; m
claims data.
internal and external factors i

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