Final answer:
An auditor would review or recompute amortization of intangible assets to support the financial statement assertion of valuation and allocation, ensuring amortization expense accurately reflects the assets' economic benefits over their useful lives and complies with accounting standards.
Step-by-step explanation:
In auditing intangible assets, an auditor most likely would review or recompute amortization and determine whether the amortization period is reasonable in support of management's financial statement assertion of valuation and allocation. The auditor is tasked with ensuring that the intangible assets recorded in the financial statements are presented at the appropriate value and that the amortization expense is calculated correctly and reflects a reasonable estimate of the economic benefits of the intangible assets over their useful lives.
During the audit process, the auditor will assess if the chosen amortization methods are in line with generally accepted accounting principles (GAAP) and whether the amortization periods used are justified based on the nature of the assets. They will recompute the amortization expense to check for accuracy and also evaluate external factors such as legal, regulatory, or contractual provisions that may affect the useful life of the intangible assets. Ultimately, the goal is to ascertain the assets' contribution to the production of future economic benefits and the appropriateness of the amortization periods applied by management.
It is critical that the amortization of intangible assets be handled correctly as it impacts the financial statements and the company's reported earnings. Therefore, a thorough review of the amortization process is a key aspect of financial statement auditing in relation to intangible assets.