Goodwill is often identified as a significant audit risk area by auditors and is likely to be a critical audit matter disclosed in audit reports for companies with goodwill impairment(s).

Question

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Goodwill is a complex and subjective area of accounting and requires significant judgment and estimation by management. Therefore, it is considered a significant audit risk area by auditors. Additionally, if a company has identified goodwill impairment, it is likely to be a critical audit matter, which is required to be disclosed in the audit report.

Goodwill Is Often Identified as a Significant Audit Risk Area