Audit Procedures for Pension and Post$-$Employment Benefits:

Pension and post$-$employment benefits are significant liabilities for many companies, requiring careful auditing to ensure accuracy and compliance with accounting standards. Here are some key audit procedures:

Review of Plan Documents: Auditors review pension and post$-$employment benefit plan documents to understand the terms, contribution requirements, benefit calculations, and funding arrangements.

Assessment of Actuarial Assumptions: Auditors evaluate the reasonableness of actuarial assumptions used to calculate pension obligations, such as discount rates, salary escalation rates, mortality rates, and expected rates of return on plan assets.

Testing of Contributions and Payments: Auditors verify the accuracy and completeness of contributions made by the employer to the pension plan and payments made to retirees for post$-$employment benefits.

Validation of Plan Assets: Auditors assess the valuation and existence of plan assets, including investments held in the pension fund, ensuring they are properly accounted for and safeguarded.

Evaluation of Disclosure Requirements: Auditors review the adequacy and accuracy of disclosures related to pension and post$-$employment benefits in the financial statements and footnotes, ensuring compliance with relevant accounting standards such as ASC $715.$

Assessment of Regulatory Compliance: Auditors assess the company's compliance with regulatory requirements and reporting obligations related to pension and postemployment benefits, including disclosures in the annual report and filings with regulatory authorities.

Objective Type Question:

Based on the audit procedures for pension and post$-$employment benefits, which audit procedure focuses on evaluating the reasonableness of actuarial assumptions used in calculating pension obligations?

A$)$ Review of Plan Documents

B$)$ Testing of Contributions and Payments

C$)$ Assessment of Actuarial Assumptions

D$)$ Validation of Plan Assets