A survey of accountants and auditors of small and medium business units about the audit of intangible items
A survey of accountants and auditors of small and medium business units about the audit of intangible items
.Intangible items audit. Intangible items audit includes checking and evaluating items
.which are not registered in the company’s accounting books or financial statements
.But they may have a significant impact on taxes, profits and losses, investors and other factors
.For example, hidden contracts, vague obligations, lawsuits and other possible misconduct
lead to the failure of the company. In the audit of these items, the auditor must carefully check different parts of the company to find such overlooked information
The Federation of European Accountants and Auditors has reviewed the results of its recent survey of accountants and auditors of small and medium-sized business units regarding the degree of coordination of accounting for intangible items throughout Europe
Intangible assets are often the main factor in the value of a company.
While considerable regulation by the European Union governs how to report intangible assets in the financial statements of public interest companies
No accounting guidelines have set specific rules for reporting intangible assets except goodwill in small and medium-sized companies
Therefore, the European Federation of Accountants and Auditors conducted the present review with the aim of gaining insight
regarding the way of accounting of intangible assets in the jurisdictions of the member countries of the European Federation of Accountants and Auditors.
The objectives of this review are:
Determining the applicable regulatory framework for accounting for intangible assets in each jurisdiction
Comparison of regulatory frameworks
Determining whether there are drivers that influence the acquisition and valuation of intangible assets.
An awareness of the current debates surrounding intangible assets in Europe
Not surprisingly,
The results of this study showed that there are significant differences between European jurisdictions regarding the way intangible assets are treated and accounted for by small and medium business units.
As a result, the users of financial statements of small and medium business entities should be warned about the lack of comparability of information related to intangible items.