According to Generally Accepted Auditing Standards,the Relevant Aspects of a Control

question 22

Essay

According to generally accepted auditing standards,the relevant aspects of a control system over the preparation of accounting estimates include:
 Identifying where accounting estimates are required.
 Gathering relevant,sufficient,and reliable data for the estimates.
 Developing assumptions about the estimates.
 Preparation of estimates by qualified personnel.
 Adequate review and approval by appropriate levels of authority.
 Comparison of previous estimates with actual results.
 Consideration by management of whether the accounting estimates are reasonable and consistent with the company's operational plans.
Required:
A)How would the auditor test controls over the preparation of accounting estimates?
B)What substantive audit procedures could the auditor use in testing the estimates?

• A)How would the auditor test controls over the preparation of accounting estimates?
• B)What substantive audit procedures could the auditor use in testing the estimates?

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Definitions:

Economic Adversity

Financial hardship or difficulties, often leading to a lower standard of living or poverty.

Prejudice

Preconceived opinions or judgments toward people or a group based on race, religion, gender, etc., without complete knowledge or experience.

Discrimination

The unfair treatment or discrimination against various groups of individuals, particularly based on race, age, or gender.

Miscegenation

Marriage or sexual relations between a man and a woman of different races.