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

According to current accounting principles,for the purposes of testing impairment,goodwill resulting from the acquisition process must be identified

Related entity transactions can most often be discovered by auditors while performing which of the following procedures?

Which of the following will management of the acquiring company typically engage to determine,for reporting purposes,the value of assets and liabilities of the target company?

For internal control purposes,the audit team may consider whether dividends declared and paid have been approved by which of the following?

The excess of the purchase price paid for a company over the fair market value of identifiable intangible and tangible assets acquired is goodwill.

When an auditor is uncomfortable with the work of a valuation expert pertaining to the fair value of the assets and liabilities acquired in an acquisition,another third-party specialist may be utilized to further test the evidence.

The acquisition of an entity or division may be performed through which of the following forms of consideration?

In an acquisition,the definition of a reporting unit usually does not involve which of the following?

Now that the accounting for business combinations has been refined by the FASB,accountants need not consider further changes.

Financial statement disclosure of significant customers is necessary due to the inherent risks involved.

How is the valuation and testing of goodwill for impairment best facilitated by a company?

The initial offer to purchase another entity may change due to terms that cover post-audit valuation changes.

Transactions between companies and related entities must be eliminated in consolidation or fully disclosed in the financial statements.

If an operating unit is sold,the goodwill related to that unit may remain on the books of the reporting entity until replaced by another acquisition.

Goodwill impairment is a measurement problem that should be addressed when?

In mergers and acquisitions,the term used for the acquired segment to which the goodwill from the acquisition is assigned is called the

An audit firm will test the pension obligation of a client by performing which of the following procedures?

If the operating unit relating to goodwill is not the reporting unit,estimates using cash flow may be necessary to derive the fair market value of the unit.

The impairment of goodwill should be addressed immediately if there is a significant adverse change in the business environment.

The auditor will examine proceeds and trace them to recorded amounts of the par value of common stock to determine that