Auditing Goodwill

NotesPaper exam

Audit procedures & Evidence needed as follows:

Basic procedures include:

  1. Obtain the legal purchase agreement and confirm the date of the acquisition

  2. Inspect the purchase agreement, confirm the consideration paid, and details of any contingent consideration, including its amount, date potentially payable, and the factors on which payment depends

  3. Confirm % owned through a review of shareholder register, and by agreement to legal documentation

  4. Agree any cash paid to cash book and bank statements

  5. Review the board minutes for discussion regarding the purchase

  6. Obtain the due diligence report prepared by the external provider and confirm the estimated fair value of net assets at acquisition

  7. Recalculate goodwill

NotesPaper exam