There Are Two Primary Reasons to Conduct an Intellectual Property

question 16

Multiple Choice

There are two primary reasons to conduct an intellectual property audit. First, it is prudent for a company to periodically determine whether its intellectual property is being properly protected. The second reason for a company to conduct an intellectual property audit is to ________.

• A) remain prepared for a Security & Exchange Commission spot inspection
• B) remain prepared to justify its value in the event of a merger or acquisition
• C) remain prepared for an initial public offering
• D) update the value of its intellectual property on its balance sheet
• E) make sure no intellectual property has been stolen

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Definitions:

Reporting Principles

The foundational guidelines that govern the preparation and presentation of financial reports, ensuring accuracy, consistency, and transparency.

Historical Cost Principle

An accounting principle that requires financial statements to be based on the original cost of an asset, rather than its current market value.

Consistency Principle

An accounting principle that requires entities to apply the same accounting methods and policies from period to period unless a change is justified and disclosed.

Accounting Methods

The specific rules and procedures used by a business to prepare its financial statements, including how it recognizes revenue and expenses.