What are the key concepts and related definitions relating to CAS 540.07?
What will be an ideal response?
(a) Accounting estimate - an approximation of a monetary amount in the absence of a precise means of
measurement. If the estimate involves only measurement at fair value, the term "fair value accounting
estimate" is used.
(b) Auditor's point estimate or auditor's range - the amount or range of amounts, respectively, derived
from audit evidence for use in evaluating management's point estimate.
(c) Estimation uncertainty - the susceptibility of an accounting estimate and related disclosures to an
inherent lack of precision in its measurement.
(d) Management bias - a lack of neutrality by management in the preparation and presentation of
information.
(e) Management's point estimate - the amount selected by management in the preparation and
presentation of information.
(f) Outcome of an accounting estimate - the actual monetary amount which results from resolution of
the underlying transaction(s), event(s), or condition(s) addressed by the accounting estimate.
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A) markup B) market-penetration C) market-skimming D) survival E) target-return
The number of degrees of freedom associated with the chi-square distribution in a test of independence is number of _____ minus 1.
A. sample items B. populations C. rows minus 1 times number of columns D. populations minus number of estimated parameters
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Indicate whether the statement is true or false
What is the role of an auditor in financial statement analysis?
What will be an ideal response?