Auditors sometimes encounter situations in which the outcome of a matter cannot be reasonably estimated at the time the financial report is issued.These matters are referred to as:
A) significant uncertainties.
B) non sequiturs.
C) in suspense matters.
D) inestimable matters.

Question

Quizplus · Accepted Answer

The term used for situations where the outcome cannot be reasonably estimated is "significant uncertainties." Option B, non sequiturs, is unrelated to the situation described. Option C, in suspense matters, does not accurately reflect the situation as it implies that the matter is on hold or pending, rather than uncertain. Similarly, option D, inestimable matters, is not correct because it suggests that the outcome cannot be estimated at all, rather than just being uncertain at the time of the financial report.

Auditors Sometimes Encounter Situations in Which the Outcome of a Matter