Analytical estimation of depreciation by the auditor is an important audit test because it does which of the following?
A)it signals which additions will be vouched.
B)it yields statistical precision in sampling.
C)it is a good starting point for determining additional procedures.
D)it gives the auditor an indication of the impaired balances existing in financial statements.

Question

Quizplus · Accepted Answer

Analytical estimation of depreciation by the auditor can provide a starting point for determining additional procedures to test the accuracy of the depreciation expense recorded in the financial statements. It allows the auditor to assess whether the depreciation expense is reasonable and consistent with prior periods. It does not signal which additions will be vouched, yield statistical precision in sampling, or indicate impaired balances.

Analytical Estimation of Depreciation by the Auditor Is an Important