The Client Makes Estimates Relative to Recorded Amounts in the Financial

question 115

Multiple Choice

The client makes estimates relative to recorded amounts in the financial statements.In determining the reasonableness of these estimates the auditor should consider which of the following?

• A)Historical trends and information.
• B)Results of reconciliation procedures.
• C)That there is an adequate cushion.
• D)That management hired independent experts to quantify all estimates .

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Definitions:

Tangible Personal Property

Physical items owned by an individual or entity, such as furniture, vehicles, and electronics, excluding real estate.

Real Property

Land and anything permanently attached to it, such as buildings, fences, and natural resources, recognized as a form of tangible assets.

Immovable Property

Property that cannot be moved, such as land and anything permanently affixed to it, like buildings.

Property Held In Fee

A form of ownership where the owner has complete control over the property and can use, enjoy, or dispose of it at will; often referred to as fee simple ownership.