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.

---

Definitions:

Environmental Standards

Regulatory benchmarks designed to control pollution and protect the environment, ensuring air, water, and soil quality meets safety thresholds.

Specified

Identified explicitly or in detail.

Raw Materials

Basic materials from which products are made, typically extracted from the earth and used in the initial stages of production.

Different Industries

Various sectors of the economy engaged in diverse forms of productive activities, ranging from agriculture and manufacturing to services and technology.