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:

Rule

A prescribed guide for conduct or action; within computing, it typically refers to a specific condition or criterion used in algorithms or to define operational behaviors.

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