Question
OZ runs a hotel loyalty program which enables members of the program to earn points for every dollar spent on an accommodation, food and beverages
OZ runs a hotel loyalty program which enables members of the program to earn points for every dollar spent on an accommodation, food and beverages at OZ branded hotels. These points may be redeemed at a later date for free accommodation or other benefits. OZ records a loyalty program future redemption liability on the basis of the number of points expected to be redeemed prior to their expiry multiplied by redemption cost per point. An announcement was made on 30 May 2017 that points earned under the loyalty program would now expire in two years rather than five years from the time they are earned. OZ's management subsequently reduced the amount provided in the loyalty program future redemption liability by $80 million based on their estimate of the revised amount required to meet the liability given the impact of the change
(a) Identify the key accounts and related assertions at risk. Briefly justify your answer
(b) Perform one substantive test of the identified assertions at risk.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started