M3 Final Audit Plan

M3 Final Audit Plan - Valuation of Intangible Assets Audit...

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Valuation of Intangible Assets Audit Objective: To test management’s assertion of the valuation of intangible assets account on the balance sheet. When looking specifically at the balance sheet, Bottlers’ Franchise Rights increased from $1,953 million in 2009 to $7,511 million in 2010. Risk of Material Misstatement: High 1. Control #1: Research on competitors and the value of their products in relation to Coca- Cola o Test of Control: Auditors can test this control by receiving documentation of industry data on competitors in related markets 2. Control #2: Research consumer trends and preferences to determine how well new products and innovations will stand in the market. o Test of Control: Auditors can obtain inquiries (such as surveys) from consumers and also question marketing and research departments on their awareness of trends. 3. Control #3: Coca-Cola performs annual impairment reviews on intangibles to determine the value compared to future cash flows. o
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