counting estimates plans which appear

124. In evaluating the assumptions on which the estimate is be

the auditor would need to pay particular attention assumptions which are a. Reasonable in light of actual
results in prior period b. Consistent with those used for other accounting esti C. Consistent with
management's plans which app
appropriate. d. Subjective or susceptible to material misstatement

125. Which of the following statements is incorrect ab

accounting estimates? a. Management is responsible for making accountin

estimates included in the financial statements. b. The risk of material misstatement is

greater when
accounting estimates are involved. C. The evidence available to support an
accounting estimate
will often be more difficult to obtain and less conclusive than evidence available
to support other items in the financial statements. When evaluating accounting
estimates, the auditor should pay particular attention to assumptions that are
objective and are consistent with industry patterns.
126. Which of the following would an auditor generally perform to
obtain assurance that accounting estimates are properly accounted for and
disclosed? a. Inquiry of management b. Make an independent estimate for
comparison with
client's estimate
Review subsequent events . Obtain knowledge about the applicable
finance
reporting standards related to the accounting estimate