Audit Procedures for Changes in Accounting Policy for Goodwill:
01.Review of Accounting Policy Change Disclosure:
Verify that the company has disclosed the change in accounting policy for goodwill in the financial statements, including the nature of the change and its impact
02.Understanding Reasons for Change:
Obtain an understanding of the reasons for changing the accounting policy for goodwill, ensuring it complies with accounting standards and is appropriately justified.
03.Assessment of Consistency:
Evaluate the consistency of the application of the new accounting policy across relevant periods, comparing it with the previous policy.
04.Review of Accounting Estimates:
If applicable, assess the reasonableness of any new accounting estimates associated with the change in policy, such as impairment testing parameters.
05.Examination of Supporting Documentation:
Examine supporting documentation, such as management's rationale and analysis, to validate the appropriateness of the accounting policy change.
06.Evaluation of Impact on Financial Statements:
Evaluate the impact of the change on the financial statements, ensuring that any adjustments are correctly accounted for and disclosed.
07.Testing Implementation of the New Policy:
Test the implementation of the new accounting policy to ensure that it has been consistently applied across all relevant accounts.
08.Assessment of Disclosures:
Assess the adequacy and completeness of disclosures related to the change in accounting policy for goodwill in the financial statements.
09.Communication with Experts (if necessary):
If the change involves complex valuation or estimation techniques, communicate with relevant experts to validate the reasonableness of the approach.
10.Evaluation of Management's Expertise:
Evaluate management's expertise and competence in assessing and implementing the change in accounting policy for goodwill.
By conducting these audit procedures, auditors can ensure the appropriateness, consistency, and transparency of the change in accounting policy for goodwill, providing stakeholders with reliable financial information.