The susceptibility of an accounting estimate and related disclosures to an inherent lack of precision in its measurement is referred to as ________.
A)management bias
B)estimation uncertainty
C)a "nightmare" estimate situation
D)auditor's range

Question

Quizplus · Accepted Answer

Estimation uncertainty refers to the inherent lack of precision in measuring accounting estimates, such as the useful life of a long-lived asset or the expected liability from a legal claim. This uncertainty can result from a lack of reliable data or changes in business conditions. Management bias, a "nightmare" estimate situation, and auditor's range are not the most appropriate answers for the given question.

The Susceptibility of an Accounting Estimate and Related Disclosures to an Inherent