AU-C 540 Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures states _______.
A)the objective of the auditor is to obtain sufficient appropriate evidence that accounting estimates are reasonable and disclosures are adequate
B)the objective of the internal auditor is to obtain sufficient appropriate evidence that accounting estimates are reasonable and disclosures are adequate
C)the objective of the auditor is to obtain sufficient appropriate evidence that accounting estimates are reasonable only
D)the objective of the auditor is to obtain sufficient appropriate evidence that disclosures are adequate only

Question

Quizplus · Accepted Answer

AU-C 540 states that the objective of the auditor is to obtain sufficient appropriate evidence that accounting estimates, including fair value accounting estimates, are reasonable and disclosures related to them are adequate. Therefore, choice A is the correct answer. Choice B is incorrect because it mentions the internal auditor, whereas the question pertains to the external auditor. Choice C is incorrect because it ignores the importance of disclosures in addition to the reasonableness of accounting estimates. Choice D is incorrect because it ignores the importance of the reasonableness of accounting estimates in addition to the adequacy of disclosures.