Which of the Following Statements Regarding Management Estimates Is FALSE

question 8

Multiple Choice

Which of the following statements regarding management estimates is FALSE?

• A)Complications in audit evaluation can arise from measurements involving management estimates.
• B)Auditors typically do not keep track of the differences between management estimates and the most reasonable estimates supported by audit evidence.
• C)They also identify estimates with high risk due to forecast errors,and assess whether these are fairly presented in the circumstances.
• D)In areas where GAAP are evolving,the auditor needs to exercise judgment,guided by general principles and reporting objectives,to assess fair presentation.

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Definitions:

Perceived Differences

The recognition or belief in the existence of distinctions between entities or ideas.

Comparison Groups

Groups used as a benchmark or standard of comparison to evaluate the outcomes or processes of a particular group, often in research or assessments.

Active Listening

A communication technique that involves giving full attention to the speaker, understanding their message, and responding thoughtfully.

Role Reversal

A situation in which individuals swap their roles or positions, often to gain a new perspective.