How should the auditor determine whether or not goodwill should be written down?
Goodwill is intangible asset and it should be recognized in the books only when cost is incurred to acquire it, self generated Goodwill should not be recognized in the books.
The auditor should written down the Goodwill if circumstances indicate that the carrying value may not be recoverable.
If no future cash flow is generated from the Goodwill recognized it should be written down.
If auditor thinks that carrying value of Goodwill is less than the net recoverable value then he should written down the Goodwill and recognise it as an expense.
How should the auditor determine whether or not goodwill should be written down?
Each of the following describes goodwill, except: Once written down, it may be written up for recoveries. It must be tested for impairment at least annually. Goodwill impairment losses are recognized in income from continuing operations or income before extraordinary gains and losses. It must be reported as a separate line item in the balance sheet.
How could the auditor determine whether or not this asset has not been impaired?
Goodwill should: be written off as soon as possible against retained earnings. absent impairment, not be written off because it has an indefinite life. written off as soon as possible as an expense. amortized over a maximum of forty years. For accounting purposes, goodwill: is recorded whenever a company achieves a level of net income that exceeds the industry average. is recorded when a company purchases another business. is expensed in the period it is recorded because benefits from goodwill...
When the operating effectiveness of a control is not evidenced by written documentation, an auditor should obtain evidence about the control’s effectiveness by a. Mailing confirmations. b, Analytical procedures. c. Recalculating the balance in related accounts. d. Inquiry and other procedures such as observation.
Explain whether the auditor should proceed with conducting an audit if information received from the former auditor has significant negative information about circumstances that would require special attention.
In designing written audit plans, an auditor should establish specific audit objectives that relate primarily to the: Multiple Choice cost-benefit of gathering techniques. financial statement assertions. selected audit techniques. timing of audit procedures.
The code should be written in HTML 5. Thanks! Develop a script that will determine whether a department-store customer has exceeded the credit limit on a charge account. For each customer, the following facts are available: a) Account number b) Balance at the beginning of the month c) Total of all items charged by this customer this month d) Total of all credits applied to this customer's account this month e) Allowed credit limit The script should input each of...
An auditor is using sampling while testing internal controls. To determine whether the results of the tests are acceptable, the auditor compares the computed upper exception rate (CUER) with: Group of answer choices SER ; EPER ; ASR ; ARO ; or TER ?
3. An auditor is trying to figure out if the goodwill its client recognized when it purchased a factory has become impaired. What characteristics might be used to help establish a model predicting goodwill impairment?
Which of the following factors should an external auditor should perform at the preliminary engagement (for an F/S audit) activities? The reporting status of the internal auditor within the organization. Whether policies prohibit the internal auditor from auditing areas where relatives are employed. Whether the board of directors, audit committee, or owner-manager oversees employment decisions related to the internal auditor. None of the above choices are correct