Which of the following best describes the auditors' responsibility with respect to management's estimates?
A)Verifying the mathematical accuracy of management estimates.
B)Assessing the likelihood that actual results will be consistent with management's estimates.
C)Evaluating the reasonableness of management's estimates.
D)Identifying how the failure of the entity to achieve management's estimates will influence users' decisions.

Question

Quizplus · Accepted Answer

The responsibility of auditors with respect to management estimates is to evaluate the reasonableness of management's estimates. This involves assessing whether the assumptions and methods used by management are appropriate and whether the resulting estimates are reasonable based on the information available. The auditors do not verify the mathematical accuracy of the estimates, nor do they assess the likelihood that actual results will be consistent with the estimates. While auditors may consider the impact of the failure to achieve estimates on users' decisions, this is not a primary responsibility when evaluating management estimates.

Which of the Following Best Describes the Auditors' Responsibility with Respect