Exam 14: Audit of Longer-Term Liabilities, equity, acquisitions, and Related-Entity Transactions, long-Term Liabilities, and Equity

Once a related entity transaction is identified,the audit team will do which of the following?

Which one of the following disclosures is required for reporting classes of stock in the financial statements?

What are the most important attributes that an auditor must possess in testing client's assessment of goodwill?

Valuation of assets for the purpose of acquisition accounting is simple due to the fact that the target company typically keeps the assets at fair market value.

Typically all of the following liabilities represent difficult and subjective estimates except?

If the auditor is hesitant to rely on the appraisal of a specialist hired by management,which of the following will be performed?

The SEC requires that personal use of a company's assets by officers be disclosed in the financial statements.

Goodwill impairment Identify four principles covered in the accounting literature for accounting for goodwill impairment that were provided by the FASB.

What type of expert will usually be required by management and the auditors to evaluate the purchase price of a target entity?

Current accounting principles require that goodwill be expensed according to which of the following?

The auditor does not have an obligation to use professional skepticism for significant assumptions used by actuaries since they are independent from management and are also professionals.

Related entity transactions What are the auditor's primary concerns regarding related entity transactions and what procedures will an auditor perform to test for such transactions?

Which of the following causes valuation issues relative to the issuance of capital stock?

Long-term obligations Bond indenture are a frequent part of the issuance of bonds and other long-term debt.Discuss what bond indenture are,why the auditor is concerned about them and some of the audit procedures that would be applied because of them.What are some common types of provisions that are typically included in such agreements?

Related entity transactions transpire only between entities and individuals.

Testing of goodwill for possible impairment is often facilitated through a formal corporate budgeting system.

Once impairment losses have been taken in previous periods,any recovery of goodwill value may be used to increase the recorded balance of the intangible asset.

When stock is valued at amounts substantially greater than the value of the assets transferred to the corporation,it is called

Auditors will obtain evidence regarding board of director approval of which of the following transactions?

Goodwill is an asset that is systematically amortized over a defined number of years.