Skip to Main Content
Wiley Practitioner's Guide to GAAS 2018, 2nd Edition
book

Wiley Practitioner's Guide to GAAS 2018, 2nd Edition

by Joanne M. Flood
April 2018
Beginner to intermediate content levelBeginner to intermediate
880 pages
28h 54m
English
Wiley
Content preview from Wiley Practitioner's Guide to GAAS 2018, 2nd Edition

AU-C 540 Auditing Accounting Estimates, Including Fair Value Accounting Estimates and Related Disclosures

AU-C Original Pronouncement

Source Statement on Auditing Standards (SAS) 122.

Definitions of Terms

Source: AU-C 540.07

  1. Accounting estimate. An approximation of a monetary amount in the absence of a precise means of measurement. This term is used for an amount measured at fair value when there is estimation uncertainty, as well as for other amounts that require estimation. When this section addresses only accounting estimates involving measurement at fair value, the term fair value accounting estimates is used.
  2. Auditor's point estimate or auditor's range. The amount or range of amounts, respectively, derived from audit evidence for use in evaluating the recorded or disclosed amount(s).
  3. Estimation uncertainty. The susceptibility of an accounting estimate and related disclosures to an inherent lack of precision in its measurement.
  4. Management bias. A lack of neutrality by management in the preparation and fair presentation of information.
  5. Management's point estimate. The amount selected by management for recognition or disclosure in the financial statements as an accounting estimate.
  6. Outcome of an accounting estimate. The actual monetary amount that results from the resolution of the underlying transaction(s), event(s), or condition(s) addressed by the accounting estimate.

Objective of AU-C Section 540

AU-C Section 540.06 states that:

…the objective of the auditor ...

Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.
Start your free trial

You might also like

Wiley Practitioner's Guide to GAAS 2020

Wiley Practitioner's Guide to GAAS 2020

Joanne M. Flood

Publisher Resources

ISBN: 9781119396482Purchase book