question archive In evaluating an entity's accounting estimates, one of the auditor's objectives is to determine whether the estimates are A
In evaluating an entity's accounting estimates, one of the auditor's objectives is to determine whether the estimates are A
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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 objection assumptions
D. Reasonable in the circumstances.
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Answer. Option D is correct- Reasonable in the circumstances.
In evaluating entities' accounting estimates one of the auditor's objectives is to determine whether the estimates are reasonable in the circumstances and are in accordance with GAAP.
Option A. is incorrect as a satisfactory control environment has nothing to do with accounting estimates.
Option B. is incorrect as industrial guidelines does not determine the amount of an accounting estimate.
Option C. is incorrect as objective assumption is not related with accounting estimates in any way. Accounting estimates depends on future happening and are totally uncertain.
