Final answer:
Auditors must examine internal controls, verify existence and ownership, utilize valuation techniques, engage specialists for high-tech assets, and verify amortization methods to audit the valuation of intangible assets for a high-tech company.
Step-by-step explanation:
When auditing the valuation of intangible assets for a high-tech company, there are several key procedures that an auditor should perform to obtain sufficient appropriate audit evidence. First, the auditor should review and assess the company's internal controls over the recording and valuation of intangible assets. This includes examining policies and procedures for intangible asset recognition, measurement, and impairment testing.
Next, the auditor should examine relevant documentation, such as purchase agreements, to verify the existence and ownership of the intangible assets. The auditor should also use valuation techniques, like comparing the carrying amount of the assets to the present value of expected future cash flows or obtaining independent valuations, to assess the reasonableness of the company's valuation.
Furthermore, considering the high-tech nature of the assets, the auditor may engage a specialist to help in assessing the technology's current market position and future prospects, which are essential factors in valuation. Verification of amortization methods and periods is also critical, as it impacts the carrying value of the intangibles.
Finally, the auditor should review subsequent events and transactions that may affect the intangible assets' valuation, looking for indicators of impairment and ensuring that any adjustments are properly reflected in the financial statements.