Fair Value Estimates

Question 0

Fair value responsibility

Answer 0

To determine if the AE are reasonable and whether the disclosures are adequate in view of the framework

The auditor will consider whether or not the nature is the significant assumptions used in fair value measurements, the degree of subjectivity involved in developing those assumptions, and the relative materiality of the items being measures at fair value need to be communicated to those charged with governance

Question 1

AU 540

Answer 1

Auditing accounting estimates

Obtain evidence about whether accounting estimates are reasonable and whether the related disclosures are adequate in view of the appropriate financial reporting framework

Question 2

The auditing procedure that provides the best indicator of “fair value” is?

Answer 2

Examining published price quotation in an active market

Question 3

Tests of control are not substantive audit procedures

Answer 3

True

Question 5

The decision to engage a specialist is an auditor PROFESSIONAL judgment not a management decision.

Answer 5

True