In Evaluating the Reasonableness of an Entity's Accounting Estimates, an Auditor

question 108

Multiple Choice

In evaluating the reasonableness of an entity's accounting estimates, an auditor normally would be concerned about assumptions that are:

• A) Susceptible to bias.
• B) Consistent with prior periods.
• C) Insensitive to variations.
• D) Similar to industry guidelines.

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Definitions:

Military Aid

Assistance provided by one country to another in the form of defense equipment, training, or other support services for military purposes.

Commercial Activities

Business operations and transactions involving the exchange of goods and services with the objective of earning profit.

High Tariffs

Government-imposed taxes on imported or exported goods intended to protect domestic industries, but can lead to international trade disputes.

Freedom From Want

A concept popularized by President Franklin D. Roosevelt as one of the Four Freedoms, referring to the right to an adequate standard of living and economic security.