As per research, I have identified that in the era of 1980s, merger and acquisition of business proposals was a game changer for most of the businesses. Larger firms used to acquire small businesses for their operations, synergy or even goodwill. There rose a debate which formed a controversy regarding valuation of internally generated brand or acquired brand. The valuation of brands was a serious issue as the same cannot be reliably recognised. I have found that most of the auditing professional agreed that it was a difficult matter to make brands auditable. The aspect which affected the valuation of brands was creditability and what consideration is to be taken for assessing the valuation. The auditor was able to check the accuracy of the calculations which is made by the management for valuing the assets but the methodology which is used by the business cannot be assessed. The principle of professional scepticism requires the auditor to check in details regarding all the values which includes values of brand which is quite a difficult task.
In making the brand valuation more auditable, the reliability of the valuation process is essential. In recent years the auditors have given clean reports to companies show decent valuation process of brands. These steps have made brand more auditable in nature. As per the journal, it is clear to me more and more firms are trying to value the brands for the purpose making the auditable. The auditor in an effort to make the brand valuation auditable has started to rely on the valuation which is done by accounting experts rather than valuing the assets themselves. In practice brand accounting has been made a legitimate practice in UK and thereby the same has made brands auditable. Therefore, from the discussion. It is clear to me that appropriate steps have been taken by the auditors in order to make different brands as assets of the business.
The steps which are taken by an auditor for making things auditable included formulation of commercial strategies for making improvements in the auditing process. The auditor needs to have appropriate knowledge regarding the steps which needs to be taken for making items auditable in nature. As per the paper which is considered, I found that in order to make research activities of business can be made auditable the measurement system of time recording system creates a layer of activities. From the research of the paper, I was able to understand that brand accounting is auditable and was depended on the creditability of the accounting experts of the business. Therefore, it is clear to me that a thing which was considered to be un-auditable in the beginning would now be considered to be auditable on the basis of trust on the accounting expert. The second aspect which makes an item auditable is the management system which is used by the company for providing detail disclosures regarding the items which was considered to be un-auditable in nature. Another important aspect which helps to make an item auditable is detailed investigation and measurement of the items which makes the audit item measurable. In case of audit of academic research, the nature of audit is very costly process and is very much time consuming in nature.
As per the research paper analysis, it is clear that in making things auditable, the cost of the audit process is immense which is one of the difficulty in such kind of audit process. The assurance function of the audit is easy part of the process. Therefore, it is clear that the three cases which is shown in the research journal how the building of auditable facts involves proper documentation and knowledge of the area. An audit report which is issued by the auditor is based on legitimacy of the information which is included in the financial statements of the business. The opinion which is issued by the auditor require detailed judgement and assumption of estimates. The three cases which is states in the research paper challenges the concept of verifiability of the auditing process. Therefore, it is clear to me that the role of an auditor and also the management of the company is very important for making items which are included in the annual report of the business as auditable.
