20-28 (Objective 20-4) Chief executive officer compensation can be a material amount and is often scrutinized by regulators, analysts, competitors, and investors. For CEOs of pub-licly traded companies, compensation can consist of salary, bonus, stock option grants, or other stock awards that can be restricted in terms of how long the officers and directors are required to hold the stock. Publicly traded companies are required by the Securities and Exchange Commission to provide disclosures about the components of executive compensation in the company's annual proxy statement.

a. Visit the SEC's Web site (www.sec.gov) to locate the annual proxy statement (the "DEF 14A" filing) submitted to the SEC on March 20, 2015, for Yum Brands, Inc., which owns Kentucky Fried Chicken, Pizza Hut, and Taco Bell restaurants. Locate the Summary Compensation Table within the annual proxy statement and identify the components of the Chairman and Chief Executive Officer's total compensation for 2014.

b. Provide at least one audit procedure the auditor would perform to test the Chairman and CEO's salary. What audit objective is satisfied with this audit procedure?

c. Provide at least one audit procedure the auditor would perform to test the occurrence objective related to the awarding of the Chairman and CEO's stock awards and stock option/stock appreciation rights (SAR).

d. How would the auditor test the fair value of the stock option/stock appreciation rights (SAR)?

e. Why are the presentation and disclosure-related audit objectives so important for stock-based compensation?

22-27 (Objectives 22-3, 22-4) The table below is an excerpt from Apple Inc.'s Statement of Shareholders' Equity for its fiscal year ended September 27, 2014:

a. How would the auditor verify the balances as of September 28, 2013?

b. What would the auditor do to evaluate the amount shown as Net Income?

c. What sources of evidence might the auditor use to satisfy the occurrence objective for each of the following? (1) Repurchase of common stock (2) Share-based compensation (3) Common shares issued d. How should the amounts shown as of September 27, 2014, relate to the amounts shown in Apple's balance sheet as of the same date?

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