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:

Internal Perspective

A focus on factors within an organization, such as policies and employee attitudes, that impact its operations.

Work Load

The amount of work assigned to or expected from an individual or team within a specified time frame.

Internal Perspective

The viewpoint focusing on internal factors and operations within an organization that influence its performance and decision-making.

Annual Performer

An individual or entity evaluated based on performance over the course of a year, often in terms of productivity, achievements, or contributions.