(c) Lamont owns a residential apartment above its head office. Until 31 December 2006 it was let for $3,000 a
month. Since 1 January 2007 it has been occupied rent-free by the senior sales executive. (6 marks)
Required:
For each of the above issues:
(i) comment on the matters that you should consider; and
(ii) state the audit evidence that you should expect to find,
in undertaking your review of the audit working papers and financial statements of Lamont Co for the year ended
31 March 2007.
NOTE: The mark allocation is shown against each of the three issues.
正确答案：
(c)Rent-freeaccommodation
(i)Matters
■TheseniorsalesexecutiveisamemberofLamont’skeymanagementpersonnelandisthereforearelatedparty
■TheoccupationofLamont’sresidentialapartmentbytheseniorsalesexecutiveisthereforearelatedparty
transactioneventhoughnopriceischarged(IAS24RelatedPartyDisclosures)
■Relatedpartytransactionsarematerialbynatureandinformationaboutthemshouldbedisclosedsothatusersof
financialstatementsunderstandthepotentialeffectofrelatedpartyrelationshipsonthefinancialstatements
■Theprovisionof‘housing’isanon-monetarybenefitthatshouldbeincludedinthedisclosureofkeymanagement
personnelcompensation(withinthecategoryofshort-termemployeebenefits)
■Thefinancialstatementsfortheyearended31March2007shoulddisclosethearrangementforprovidingthe
seniorsalesexecutivewithrent-freeaccommodationanditsfairvalue(ie$3000permonth)
Tutorialnote:Sincenopriceischargedforthetransactionrote-learneddisclosuressuchas‘theamountofoutstanding
balances’and‘expenserecognisedinrespectofbaddebts’areirrelevant
(ii)Auditevidence
■Physicalinspectionoftheapartmenttoconfirmthatitisoccupied
■Writtenrepresentationfromtheseniorsalesexecutivethatheisoccupyingtheapartmentfreeofcharge
■Writtenrepresentationfromthemanagementboardconfirmingthattherearenorelatedpartytransactionsrequiring
disclosureotherthanthosethathavebeendisclosed
■Inspectionoftheleaseagreementwith(orpaymentsreceivedfrom)theprevioustenanttoconfirmthe$3000
monthlyrentalvalue
