Which of the Following Controls Related to Management's Asset Impairment

question 60

Multiple Choice

Which of the following controls related to management's asset impairment judgments does the auditor need to understand?

• A)A systematic process to identify assets that are not currently in use.
• B)Projections of future cash flows that is based on management's strategic plans and economic conditions.
• C)Systematic development of current market values of similar assets prepared by the client.
• D)All of the above.

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Definitions:

Fair Value

The price one would receive for offloading an asset or would pay to reassign a liability during a formal transaction with participants in the market at the time of valuation.

Consolidated Balance

Refers to the presentation of assets, liabilities, and equity in a single balance sheet that combines the financials of a parent company with its subsidiaries.

Parent

In corporate finance, refers to a company that holds a controlling interest in one or more subsidiary companies.