An auditor generally concludes that a client's estimate is appropriate if:
A) it is consistent with a prior year amount.
B) the underlying amount is not known with certainty.
C) it is within a range of acceptable amounts.
D) the underlying assumptions are subjective.

Question

Quizplus · Accepted Answer

An auditor generally concludes that a client's estimate is appropriate if it falls within a range of acceptable amounts. This means that the estimate is within a reasonable and supportable range based on available information at the time of the audit. Consistency with prior year amounts, unknown certainty of underlying amounts, and subjectivity of underlying assumptions do not necessarily indicate the appropriateness of an estimate.

An Auditor Generally Concludes That a Client's Estimate Is Appropriate