Which of the following is a basic approach often used by auditors to evaluate the reasonableness of accounting estimates?
A)Confirmation.
B)Observation.
C)Reviewing subsequent events or transactions.
D)Analyzing corporate organizational structure.

Question

Quizplus · Accepted Answer

Reviewing subsequent events or transactions is a basic approach often used by auditors to evaluate the reasonableness of accounting estimates. This involves examining events or transactions that occur after the reporting date but before the financial statements are issued to determine if they provide evidence to support or contradict the accounting estimates made by management. Confirmation, observation, and analyzing corporate organizational structure may be used in other parts of the audit process, but they are not typically used specifically to evaluate accounting estimates.

Which of the Following Is a Basic Approach Often Used