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Audit evidence > Accounting Estimates > Flashcards

Accounting Estimates Flashcards

1
Q

Accounting estimates

A

susceptible to bias

Reasonable

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2
Q

If auditor is concerned about identifying MATERIALITY AE then it is necessary to discover unrecorded estimates.

A

Auditor can review lawyers letter of information about litigation to discover unrecorded estimates

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3
Q

In evaluating the reasonableness of AE the auditor concentrates on?

A

*must first understand how management developed the particular accounting estimates

Significant to AE
Sensitive to variations
Deviations from historical patterns
Subjective and susceptible to misstatement and bias

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Audit evidence (13 decks)

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