ACC ESTimates rel DISC_ AA_Chapter_39

ACC ESTimates rel DISC_ AA_Chapter_39 - Chapter 39 Audit of...

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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 1 Chapter 39 Audit of Accounting Estimates and Related Disclosures
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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 2 Agenda 1. Nature of Accounting Estimates 2. Audit Objectives 3. Risk Assessment Procedures and Related Activities 4. Identifying and Assessing the Risks of Material Miss 5. Responses to the Assessed Risks of Material Missta 6. Further Substantive Procedures to Respond to Signi 7. Evaluating Reasonableness and Determining Missta 8. Disclosures 9. Indicators of Possible Management Bias 10. Written Representations 11. Documentation
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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 3 1. Nature of Accounting Estimates Some financial statement items cannot be measured precisely, but can only be estimated There are situations where accounting estimates, other than fair value accounting estimates, may be required. For example: Allowance for doubtful accounts; Inventory obsolescence; Warranty obligations; and Depreciation method or asset useful life.
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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 4 1. Nature of Accounting Estimates There are situations where fair value accounting estimates may be required. For example: Complex financial instruments, which are not traded in an active and open market; Share-based payments; and Property or equipment held for disposal.
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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 5 2. Audit Objectives Obtain sufficient appropriate audit evidence about whether accounting estimates, including fair value
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ACC ESTimates rel DISC_ AA_Chapter_39 - Chapter 39 Audit of...

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