An intangible asset is a long-lived asset that does not have physical substance. Similar to other assets on the balance sheet, we perform the audit of the intangible asset by testing several audit assertions such as existence, valuation, right and obligation, and completeness.
-Intangible assets may include copyright, patent, license, software, goodwill (from business combination), etc. The goodwill from the business combination is usually considered a significant intangible asset that has the highest audit risk among other intangible assets.
-We perform the audit of the intangible asset to obtain sufficient appropriate audit evidence to form an overall conclusion on the carrying value of the intangible assets as of reporting date.
The recognition of intangible assets and their valuation has consistently remained among the important issues for auditors and the regulatory body that oversees the auditing profession.
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