Arguments in the goodwill debate

Article Abstract:

Goodwill is the excess of the costs of an acquisition over the fair value of the net assets of the firm being acquired. Statement of Standard Accounting Practice (SSAP) 22 on goodwill favored amortization over a preferred write-off against reserves, but offered little guidance for the calculation of goodwill. The lack of guidance led to a disparity in the accounting methods of companies, exposing both the inadequacy of SSAP 22 and the fact that an acceptable method of goodwill accounting has still not been created in the UK. The difficulty inherent in goodwill accounting is the lack of a technique for the precise estimation of goodwill, as goodwill is represented by unrealized but anticipated cash flows. An accounting standard for goodwill should take into account that goodwill does not always depreciate, and should create criteria that determine whether or not depreciation actually has occurred.

Accounting and auditing, Goodwill (Business), Great Britain

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Can you hide behind employee status?

Article Abstract:

The role of internal auditors is in flux in the UK as a result of recent legislation and the deregulation of the financial industry. Internal auditors seem to have more and more liability in the new environment, partly attributable to the vagueness of the internal auditor's role. The introduction of computer technology into the auditor's domain adds further confusion. Internal auditors may now be held legally responsible for financial misdeeds of superiors or the abuse of computerized information. Auditors should seek clarification of their positions both within their organization and within new legal definitions of their responsibilities.

Laws, regulations and rules, Auditing, Malpractice, Auditors

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