It Is the Auditor's Job to Review the Client's Estimate

question 32

Multiple Choice

It is the auditor's job to review the client's estimate to evaluate whether it has been determined in accordance with the applicable financial reporting framework.To do this,the auditor considers whether the allowance for doubtful accounts is properly valued based on

• A)the accounts written off during the prior year
• B)the accounts receivable balance at the end of the prior year
• C)current economic conditions
• D)the economic status of past customers
• E)the net receivable balance that should represent the amount of cash the company expects to collect in the following year
• F)both A and C
• G)both C and E

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Definitions:

Conscious Experiences

The felt aspect of being aware of internal or external existence, encompassing thoughts, feelings, and perceptions.

Blindsight

The ability of a person with a lesion in the visual cortex to reach toward or correctly “guess” about objects in the visual field even though the person reports seeing nothing.

Automatization

The process through which tasks become automatic via repeated practice, requiring less conscious thought and effort.

Unconscious

The part of the mind not in current awareness but that influences feelings, thoughts, and behaviors.