Examples of substantive procedures performed to test the reasonableness of accounting estimates include:
A)Inquiry about the method of measurement
B)Inquiry about assumptions used by management
C)Recalculate the accounting estimate
D)All of these answer choices are correct

Question

Quizplus · Accepted Answer

All of these substantive procedures are commonly used to test the reasonableness of accounting estimates. Inquiry about the method of measurement and assumptions used by management can provide insight into the reasonableness of the estimate. Recalculating the accounting estimate helps auditors to verify the accuracy of the estimate. Hence, all the answer choices are correct.

Examples of Substantive Procedures Performed to Test the Reasonableness of Accounting