274 paragraphs found
An auditor’s point estimate or range may be used to evaluate an accounting estimate directly (for example, an impairment provision or the fair value of different types of financial instruments), or indirectly (for example, an amount to be used as a …
Not all accounting estimates are subject to a high degree of estimation uncertainty. For example, some financial statement items may have an active and open market that provides readily available and reliable information on the prices at which actual …
Financial reporting frameworks often call for neutrality, that is, freedom from bias. Estimation uncertainty gives rise to subjectivity in making an accounting estimate. The presence of subjectivity gives rise to the need for judgement by management and …
Some accounting estimates, by their nature, do not have an outcome that is relevant for the auditor’s work performed in accordance with this Auditing Standard. For example, an accounting estimate may be based on perceptions of market participants at a …
Paragraphs 19–27 of ASA 315 require the auditor to obtain an understanding of certain matters about the entity and its environment, the applicable financial reporting framework and the entity’s system of internal control. The requirements in paragraph 13 …
The nature, timing, and extent of the auditor’s procedures to obtain the understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of internal control, related to the entity’s accounting …
By contrast, the accounting estimates may require significant judgements by management, and the process for making the accounting estimates may be complex and involve the use of complex models. In addition, the entity may have a more sophisticated …
The following considerations may be relevant for entities with only simple businesses, which may include many smaller entities: Processes relevant to accounting estimates may be uncomplicated because the business activities are simple or the required …
Changes in circumstances that may give rise to the need for, or changes in, accounting estimates may include, for example, whether: The entity has engaged in new types of transactions; Terms of transactions have changed; or New events or conditions have …
Obtaining an understanding of the requirements of the applicable financial reporting framework provides the auditor with a basis for discussion with management and, where applicable, those charged with governance about how management has applied the …