1. The auditor should begin testing a client's pension plan by reviewing the client's individual employee information which can be located in the human resources department. The items to be tested include which employees qualify for a pension and the type of pension is offered by the company. The related audit objective for this procedure is existence. Next, the auditor needs to determine the net change of the assets at year end. Auditors need to test the annual asset growth to see if the average annual growth will be large enough to meet the future cash payments. The related audit objective for this procedure is completeness. Then, the auditor needs to test the actuary estimates to determine if the company has too much risk due to the pension plan discount rate. Auditor's need to calculate the discount rate that they feel is appropriate to be applied to the company's pension plan. The related audit objective for this procedure is valuation. The auditor also needs to vouch a sample of pension expenses to an employee's pension plans to examine the pension payments. The related audit objective for this procedure is rights and obligations. Finally, the auditor needs to review financial statements to ensure the client is not trying to manipulate reported earnings by choosing a higher than normal discount rate. The related audit objective for this procedure is completeness.

2. An auditor should seek outside experts to assist them when an expert who has work in a specific job field can be useful to the auditor to assist them in obtaining sufficient appropriate audit evidence. An expert is used to decrease the risk that a material misstatement will not be detected. An expert would be useful to an external auditor when the auditor hires an actuarial firm to help make the discount rate estimates of a client. The actuarial firm is independent of the internal and external auditor, competent, and has sufficient reliable information to develop the estimates. The discount rate estimate by the external actuarial firm will provide a unbiased discount rate which will help the external auditor decide if the discount rate applied by the client is sufficient.

3. I do not believe that Deloitte behaved properly by accepting GM's decision to apply a 6.75 percent discount rate to its pension liabilities. This selected discount rate is considerably higher than