Which of the Following Procedures Would an Auditor Ordinarily Perform

question 780

Multiple Choice

Which of the following procedures would an auditor ordinarily perform first in evaluating management's accounting estimates for reasonableness?

• A) Develop independent expectations of management's estimates.
• B) Consider the appropriateness of the key factors or assumptions used in preparing the estimates.
• C) Test the calculations used by management in developing the estimates.
• D) Obtain an understanding of how management developed its estimates.

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Definitions:

Lateralization

Literally, “sidedness,” referring to the specialization in certain functions by each side of the brain, with one side dominant for each activity. The left side of the brain controls the right side of the body, and vice versa.

Human Mortality

The state of being subject to death; the recognition of this condition affects individual and societal behavior and beliefs.

Phallic Stage

A phase in Freudian psychosexual development, typically occurring from ages 3 to 6 years, where the child's libido centers upon their genitalia.

Electra Complex

A psychoanalytic theory suggesting a girl's psychosexual competition with her mother for possession of her father, considered parallel to the Oedipus complex in boys.