In evaluating an entity's accounting estimates,one of the auditor's objectives is to determine whether the estimates are
A)Prepared in a satisfactory control environment.
B)Consistent with industry guidelines.
C)Based on verifiable objective assumptions.
D)Reasonable in the circumstances.

Question

Quizplus · Accepted Answer

The objective of evaluating accounting estimates is to determine whether they are reasonable in the circumstances, including whether they are based on verifiable objective assumptions. While a satisfactory control environment and consistency with industry guidelines are important, they are not the primary objectives in evaluating accounting estimates.

In Evaluating an Entity's Accounting Estimates,one of the Auditor's Objectives