Auditing · Lesson 11 of 13

Accounting Estimates, Related Parties, Litigation, and Inventory (PSA 540, PSA 550, PSA 501)

Audit an estimate by testing how management made it, developing a point estimate or range, or examining events up to the report date, narrow an auditor's range to what the evidence supports, watch for bias that is reasonable item by item and one-sided in aggregate, treat an assertion of arm's length terms as a claim needing evidence, obtain a legal confirmation for litigation, and attend the physical inventory count.

20 min read · Super Ea