After careful review of Intel, its fiscal 2016 amortization expense, valuation statement, and completion statement pose a high risk of material misstatement . The main reason for these assessments is the drastic decrease in depreciation charges due to the increase in the useful life of some equipment and machinery from four to five years. Specifically, the depreciation expense may have been valued incorrectly, which would result in a violation of the valuation assertion. Additionally, the reported depreciation expense may not represent the entire depreciation expense, which would result in a violation of the completeness assertion. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay High Risk Accounts and Assertions After considering the information in the article, depreciation expenses are at a high risk of being materially incorrect. As a result, Intel's entire net profit may also be materially misstated. The depreciation is considered high risk because Intel has increased the useful life of a significant amount of equipment and machinery by four to five years. Intel estimated that the increase in useful life results in a $1.5 billion decrease in annual depreciation expenses. $1.5 billion represents almost 10% of 2015 pre-tax income. The risk is high due to the combination of the large amount of calculations and the large sum of money. Management's valuation statement presents a high risk due to the decrease in depreciation expenses. High risk applies to the valuation assertion because management may be incorrect in its decision to increase the useful life of some equipment. It is possible that company management increased the useful life when, in reality, it was not necessary to increase the useful life at all because the original estimate was correct. In this case, the misvaluation would be unintentional because the negative implications of a longer life outweigh the short-term increase in net income. A longer useful life could indicate a slowdown in innovation. Management's assertion of completion also presents high risk. The high risk applies to the completion assertion because Intel could have left some of the amortization expense off the books after the recalculation. Information for some machinery may have been lost in the recalculation shuffle or may have been intentionally omitted. Management might have thought that the depreciation already decreased substantially due to the change in useful life estimate and further reducing the expense by leaving some of the depreciation off the books would have gone unnoticed. Review Procedures The assessment statement can be verified by completing substantive procedures on site. depreciation expense. A number of different substantive procedures can be completed to ensure that the depreciation is not materially incorrect due to an error in valuation. The review must conclude that the useful life should have been increased. Analytical procedures and investigations should be used to confirm the increase. The audit should examine the financial statements of similar companies with similar equipment and machinery. The comparison will determine whether Intel was justified in increasing the useful life. The audit should also interview managers and find out why the increase was made and determine whether it was necessary. In addition, the audit should recalculate the depreciation of the equipment whose life.