The auditor will come up with an independent estimation of the allowance for doubtful accounts based on a thorough understanding of the client and the client's business that is compared to the recorded allowance.

Question

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The auditor is responsible for assessing the adequacy of the allowance for doubtful accounts and coming up with an independent estimation based on their understanding of the client's business. The recorded allowance is then compared to the auditor's estimation to ensure accuracy.

The Auditor Will Come Up with an Independent Estimation of the Allowance