Economics · Auditing
Which of the following statements concerning the auditing of accounting estimates is INCORRECT?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Auditors should replace management's estimates with their own preferred values in the financial statements as a default procedure.✓
- 2Auditors can formulate a point estimate to compare to management's estimate.
- 3Accounting estimates are high risk as they can be subject to management bias.
- 4It can be difficult to obtain evidence concerning accounting estimates as management uses judgement in their estimation.
Correct answer
Auditors should replace management's estimates with their own preferred values in the financial statements as a default procedure.
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