Other Audit Procedures Concepts

Question 1

Evaluating reasonableness of accounting estimate auditor would concentrate on

Answer 1

1) Significant to the estimate
2) Sensitive to variations
3) Deviations from historical patterns
4) Subjective and susceptible to misstatements and bias

Question 2

Auditor should

Answer 2

1) Inquire management about pending or potential litigation and
2) obtain letter from client’s lawyer to corroborate information