2023 Consolidated Financial Statements and Notes
pwc
Key audit matter
Measurement of the total benefit obligations
Refer to note 2 - Basis of presentation and
summary of material accounting policies,
note 3 - Critical accounting estimates and
judgments, and note 9 - Pensions and other
benefit liabilities to the consolidated financial
statements.
The Corporation has net benefit assets of
$648 million, which include total benefit
obligations associated with pension benefit
obligations of $18,309 million and other employee
future benefit obligations of $1,098 million as at
December 31, 2023.
The total benefit obligations associated with
pension benefit obligations and other employee
future benefit obligations are actuarially
determined annually as at December 31 and are
prepared by the Corporation's consulting
actuaries (management's experts). The total
benefit obligations are determined using the
projected unit credit method. Management applied
significant judgment in determining the discount
rates and mortality assumptions to develop the
estimates for the total benefit obligations.
We considered this a key audit matter due to the
significance of the total benefit obligations and
the significant judgment made by management,
including the use of management's experts,
in determining the discount rates and mortality
assumptions, which resulted in a high degree
of auditor judgment and subjectivity in performing
procedures related to those assumptions.
The audit effort involved the use of professionals
with specialized skill and knowledge in the field
of actuarial services.
How our audit addressed the key audit matter
Our approach to addressing the matter included
the following procedures, among others:
Tested how management developed the
estimates for the total benefit obligations
which included the following:
The work of management's experts was
used in performing the procedures to
evaluate the reasonableness of the total
benefit obligations associated with
pension benefit obligations and other
employee future benefit obligations. As a
basis for using this work, management's
experts' competence, capabilities and
objectivity were evaluated, the work
performed was understood and the
appropriateness of the work as audit
evidence was evaluated. The procedures
performed also included evaluating the
methods and assumptions used by
management's experts, testing the data
used by management's experts and
evaluating their findings.
Professionals with specialized skill and
knowledge in the field of actuarial
services assisted in evaluating the
appropriateness of the projected unit
credit method and the reasonableness of
the discount rates and mortality
assumptions.
Tested the disclosures, including the
sensitivity analysis, made in the consolidated
financial statements with regard to the
measurement of the pension benefit
obligations and other employee future benefit
obligations.
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