Audit Procedures for Intangible Assets and Goodwill Impairment:

Auditing intangible assets and goodwill impairment involves assessing the valuation, recognition, and impairment testing of intangible assets such as patents, trademarks, and goodwill on the company's balance sheet. Here's a brief overview of the audit procedures:

Review of Intangible Asset Recognition: Auditors examine the company's policies and procedures for identifying and recognizing intangible assets, ensuring compliance with accounting standards such as IFRS 3 (Business Combinations) and IAS 38 (Intangible Assets).

Valuation Assessment: Auditors evaluate the methods and assumptions used to value intangible assets, such as the cost approach, market approach, or income approach. They assess the reasonableness of the valuation inputs and consider external factors impacting the fair value determination.

Goodwill Impairment Testing: Auditors review the company's impairment testing process for goodwill, which typically involves comparing the carrying value of the reporting unit to its fair value. They assess the reasonableness of assumptions used in the impairment test, such as discount rates, future cash flows, and growth rates.

Assessment of Disclosure: Auditors ensure that the company provides adequate disclosure in the financial statements regarding the nature, carrying amount, and impairment status of intangible assets and goodwill. They verify the completeness and accuracy of disclosures in compliance with accounting standards and regulatory requirements.

Objective Type Question:

Which of the following audit procedures involves comparing the carrying value of goodwill to its fair value to assess impairment?

A) Review of Intangible Asset Recognition B) Valuation Assessment C) Goodwill Impairment Testing D) Assessment of Disclosure