us_10_8c_abc_company_072310(1)

us_10_8c_abc_company_072310(1) - Case 10-8 AB&C Company The...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Case 10-8 AB&C Company The engagement team is in the process of planning the audit of AB&C Company’s (“AB&C”) financial statements as of, and for the year ended, December 31, 2006. AB&C sponsors a defined benefit pension plan that it accounts for under ASC 715-30, Defined Benefit Plans – Pension ( FASB Statement No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans .) Along with planning the audit, the engagement team is in the process of understanding the entity’s pension plan investment management process sufficient to assess risk and design further audit procedures. The following information has been obtained: z AB&C’s plan assets are held in a trust with Union National Bank (“Union”), which acts as trustee and custodian for the underlying assets. z AB&C’s Retirement Plan Committee (“the Committee”) maintains a formal investment policy, which has been approved by the Board of Directors. z On the basis of the guidance provided by the Committee, Union structures the plan’s asset allocation strategy. The Committee periodically reviews plan performance and asset allocation, and makes adjustments on a quarterly basis. The current target asset allocation is 75 percent equity and 25 percent fixed income. z Given targeted allocation percentages, investments are held in five separate funds. The funds are managed by Bright Horizons (“Bright”), which is not associated with
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 01/20/2011 for the course ACC 603 taught by Professor Robertj.ramsay during the Spring '10 term at Kentucky.

Page1 / 3

us_10_8c_abc_company_072310(1) - Case 10-8 AB&C Company The...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online