Which of these is not an approach that might be adopted by an auditor in evaluating the adequacy of an allowance for bad debts?
A) reviewing subsequent events.
B) reviewing and testing the process used by management.
C) use the percentages adopted by the client.
D) use an independent estimate.

Question

Quizplus · Accepted Answer

Using the percentages adopted by the client without any form of independent verification or assessment does not constitute an adequate approach for an auditor. Auditors are expected to independently assess and verify the assumptions and calculations made by management, rather than simply accepting them at face value.

Which of These Is Not an Approach That Might Be