a) i Ownership is often concurrent with control, but it is not essential characteristic of an asset. The framework definition of assets requires future economic benefits to be controlled by an entity before they can be regarded as an asset. Required: Discuss the cconomic benefits must be controlled by the entity in order to qualify as an asset (Relate your discussion with accounting principles) (6 marks) (CLO2.PL.OS.C5) ii. Ikhsana Sdn Bhd spent RM600 000 on television advertising of its new range of sportwear during the year. Market research indicates that the advertising has definitely boosted sales. The company recognized RM600,000 as an asset Required: Criticize the Ikhsana Sdn Bhd's accounting treatment for RM600,000. (Relate your answer with recognition criteria) (7 marks) (CLO2 PLOS:C5) b) KOK Bhd an electrical goods manufacturer, entered into the following transactions during the year 2016 Required: Show how the following situation should have been recorded by KOK Bhd under Malaysian accounting regulations that year, and comment whether there are any differences in that reporting from what would be recorded by the company ACCT3601 June 2021 Page 3 of 5 i ii Philap Lamp filed a lawsuit against KOK Bhd for RM1 000 000 for patent infringement in April 2016. The companies expected that it would take approximately 18 months before the lawsuit was settled. KOK Bhd recorded this as a liability An employee suffered eye damage when a piece of glass exploded as she worked on the production line. She sued KOK Bhd for damages and was awarded RM40 000. KOK Bhd planned to appeal. KOK Bhd showed this under notes to the account (7 marks) (CLO2:PLOS:C5) c) Auditing for assets and liabilities may creates difficulties to auditors because of recognition and measurement criteria. Explain what auditors should do to develop an effective audit approach for assets and liabilitics