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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)
BlizzardCraft erroneously treated the acquisition of Simco as a
purchase transaction when it should have been a pooling of interests.
Simco should not have amortized goodwill previous to 2002.
Simco's goodwill should have been written off when purchased by
BlizzardCraft in a one-time transaction.
The goodwill related to Simco may have been impaired during
2008.
64. All of the following represent a related entity to an organization
except (Points: 4)
the president's son.
an affiliate with common ownership.
customers.