ACC 562 EDU Extraordinary Success/acc562edu.com ACC 562 EDU Extraordinary Success/acc562edu.com | Page 23

61. Which represents the most significant risk associated with
restructuring liabilities on the financial statements? (Points: 4)
Future smoothing of income by releasing the reserves.
Related party transactions that are not recorded at arms-length.
Understatement of assets in the period of recording the liabilities.
Payroll liabilities that are not disclosed in the notes.
62. All of the following are significant issues for consideration when
auditing for the impairment of goodwill, except (Points: 4)
timing of the assessment by management.
amortization in years of the goodwill.
clear objective evidence supporting the assessment.
understanding the client's business and its risks.
63. Simco's shaving products division was acquired over ten years ago
in a purchase transaction by BlizzardCraft. The related goodwill was
amortized until 2002 and $4.5 million remained on the books
thereafter. In 2008, Simco's production machinery was assessed for
impairment as a long-lived asset because of obsolescence issues. What
relationship will the auditors most likely make between the facts stated
above? (Points: 4)