Recordkeeping for the management of some intangible accounts,like goodwill,are subject to high inherent risk of overstatement because:
A)Such investment transactions are often off the balance sheet.
B)Such assets have a high risk of theft.
C)They are dependent on management estimates,which can be biased.
D)There is a high volume of such investments.

Question

Quizplus · Accepted Answer

Goodwill and other intangible assets are often dependent on management estimates for valuation, which can be biased and result in overstatement of their value. This creates a high inherent risk for overstatement in the recordkeeping for these accounts. The other options (A, B, D) are not necessarily reasons for inherent risk of overstatement for intangible accounts like goodwill.

Recordkeeping for the Management of Some Intangible Accounts,like Goodwill,are Subject