What are the most important attributes that an auditor must possess in testing client's assessment of goodwill?
A)Expertise in the laws surrounding mergers and acquisitions and the legal implications of such endeavors.
B)Sound judgment and a knowledge of the client's business and the related accounting principles.
C)Trustworthiness in attitude and a loyalty to the client as its business advisor.
D)Experience with business failures and audit scandals so that such issues can be brought to the table.

Question

Quizplus · Accepted Answer

An auditor must possess sound judgment and a knowledge of the client's business and the related accounting principles in order to test their assessment of goodwill. This includes an understanding of the assumptions and estimates made by management in determining the fair value of goodwill. Expertise in the laws surrounding mergers and acquisitions may be helpful, but is not necessarily the most important attribute. Trustworthiness and loyalty to the client are important qualities for an auditor to have, but they do not specifically relate to testing goodwill. Experience with business failures and audit scandals may be important in terms of identifying potential risks and control weaknesses, but does not directly relate to testing goodwill.

What Are the Most Important Attributes That an Auditor Must