According to Auditing Standards,specific Relevant Aspects of an Internal Control

question 2

Essay

According to auditing standards,specific relevant aspects of an internal control system for making estimates include:
• Management communication of the need for proper accounting estimates.
• Accumulation of relevant,sufficient,and reliable data for estimates.
• Preparation of estimates by qualified personnel.
• Adequate review and approval by appropriate levels of authority.
• Comparison of prior estimates with subsequent results to assess the reliability of the estimation outcomes.
• Consideration by management of whether particular accounting estimates are consistent with the company's operational plans.
Required:
a.How would the auditor test these control activities over the production of estimates?
b.What substantive audit procedures would the auditor use to test the accounting estimates?

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Definitions:

Threatened Secession

The act of a state or region declaring its intention to withdraw from a nation or federation as a means of political protest or pursuit of sovereignty.

Pro-Slavers

Advocates for the continuation or expansion of slavery, especially in historical contexts such as pre-Civil War United States.

Religious Precedent

involves decisions or actions based on previous religious or spiritual beliefs, events, or judgments that serve as an authoritative example for future situations.

Scientific Explanations

Scientific explanations are descriptions or clarifications provided by the scientific method to understand and hypothesize about phenomena in the natural world.