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hyee sir,
the quest. states explain the risks of misstatements to be considered in planning the group audit………now the answer states goodwill must be reviewed annually for impairment
my question is whether goodwill is impaired or not will be checked at the year end not now but we hv included it in the planning of the audit
Hmmm! I believe that you have not fully understood the question requirement.
When planning the audit, one of the matters to include within the plan is the procedures involved in assessing whether the goodwill figure needs to be impaired.
So the plan will cover the point “There is a risk of material misstatement if the goodwill is being carried at an inflated value. So let’s plan to carry out our own impairment review to confirm as best we can that the directors’ assessment of goodwill is realistic”
Yes, goodwill should have been reviewed as at the year end by the directors but the auditors will be aware of the risk of material misstatement and will wish to confirm as best they can the reasonableness of the directors’ assessment
OK?
ohh so actually even we as auditors will be reviewing impairment at the year end only. we are just saying to the audit partner tht there could be a risk of goodwill impairment at the yr end ?
Yes, and of course “even we as auditors will be reviewing impairment at the year end”
How else are we going to determine the reasonableness of the directors’ assessment?
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