Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Chapter 19, Problem 5RQ
To determine
Discuss why it is difficult to identify and audit assets impairments and how valuation specialist can be used to determine fair value of property and equipment
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Students have asked these similar questions
Which of the following risks is an inherent risk related to asset
impairment?
a. Determining asset impairment is based on management judgment.
b. It is difficult to identify the costs associated with the discovery of
natural resources.
c. Management might have incentives to not record all asset disposals.
d. All of the above are inherent risks related to asset impairment.
4.
When the auditor wants to test the asset for impairment, the auditor would most likely be concerned with the recoverable amount of an intangible asset. For this purpose, the recoverable amount of an intangible asset is not:
a. Fair value less cost to sell
b. Value in use
c. Fair value less cost to sell or value in use, whichever is lower
d. Fair value less cost to sell or value in use, whichever is higher
When the auditor wants to test the asset for impairment, the auditor would most likely be concerned with the recoverable amount of an intangible asset. For this purpose, the recoverable amount of an intangible asset is not:
Fair value less cost to sell
Value in use
Fair value less cost to sell or value in use, whichever is lower
Fair value less cost to sell or value in use, whichever is higher
Chapter 19 Solutions
Auditing And Assurance Services
Ch. 19 - Identify three asset accounts, three expense...Ch. 19 - Explain the relationship between substantive tests...Ch. 19 - Prob. 3RQCh. 19 - Prob. 4RQCh. 19 - Prob. 5RQCh. 19 - Prob. 6RQCh. 19 - Prob. 7RQCh. 19 - Prob. 8RQCh. 19 - Prob. 9RQCh. 19 - Prob. 10RQ
Ch. 19 - Which documents will be used to verify accrued...Ch. 19 - Prob. 12RQCh. 19 - Prob. 13RQCh. 19 - Prob. 14RQCh. 19 - Prob. 15.1MCQCh. 19 - Prob. 15.2MCQCh. 19 - Prob. 15.3MCQCh. 19 - Prob. 16.1MCQCh. 19 - Prob. 16.2MCQCh. 19 - Prob. 16.3MCQCh. 19 - Prob. 17.1MCQCh. 19 - Prob. 17.2MCQCh. 19 - Prob. 17.3MCQCh. 19 - Prob. 18.1MCQCh. 19 - Prob. 18.2MCQCh. 19 - Prob. 18.3MCQCh. 19 - Prob. 19DQPCh. 19 - Prob. 20DQPCh. 19 - Prob. 21DQPCh. 19 - Prob. 22DQPCh. 19 - Prob. 24DQPCh. 19 - Prob. 25DQPCh. 19 - You are auditing the financial statements of...Ch. 19 - Prob. 27DQPCh. 19 - Prob. 28DQPCh. 19 - Prob. 29DQP
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- The least effective means for the auditor to determine whether a recorded intangible asset possesses the characteristic of an asset is a. Vouch the purchase by reference to underlying documentation. b. Inquire as to the status of the patent application. c. Evaluate the future revenue-producing capacity of the intangible asset. d. Analyze the research and development expenditures to determine that only those expenditures possessing future economic benefits have been capitalized.arrow_forwardThe least effective means for the auditor to determine whether a recorded intangible asset possesses the characteristic of an asset is Vouch the purchase by reference to underlying documentation. Inquire as to the status of the patent application. Evaluate the future revenue-producing capacity of the intangible asset Analyze the research and development expenditures to determine that only those expenditures possessing future economic benefits have been capitalized.arrow_forwardIn order to determine usefulness of intangibles, investigation and the examination of income data related to the asset will be of assistance. True or False?arrow_forward
- How will the approach for verifying repair expense differfrom that used to audit depreciation expense? Why will the approach be different?arrow_forwardDepreciation continues to be one of the most controversial, difficult, and important problem areas in accounting. Required: 1. Explain the conventional accounting concept of depreciation accounting, and discuss its conceptual merit with respect to (a) the value of the asset, (b) the amount(s) expensed, and (c) the discretion of management in selecting the method. 2. Answer the following: a. Explain the factors that should be considered when applying the conventional concept of depreciation to the determination of how the value of a newly acquired computer system should be assigned to expense for financial reporting purposes. (Ignore income tax considerations for this case.) b. What depreciation methods might be used for the computer system?arrow_forwardShould the engineers be able to assess the reality of depreciating fixed assets?arrow_forward
- Discuss the overarching idea of Asset Liability Management and its key objectives. How does the process of Gap Analysis support Asset Liability Management?arrow_forwardAre litigation costs to defend an intangible asset capitalized or expensed? Explain your answer.arrow_forwardDiscuss the risks associated with short selling an asset. Use examples and empirical evidence in your answer.arrow_forward
- What factors or variables are considered when estimating the depletion base for an asset? Can you provide an example of how these factors are taken into account in practice?arrow_forwardWhat is the auditor’s role with respect to the fixed asset system?arrow_forwardWhy should the person who keeps the records of an asset not be the person responsible for its custody?arrow_forward
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