Estimates
You'll learn what accounting estimates are, why they matter in financial statements, and how auditors assess their reasonableness.
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In this lesson
- 0:00 Introduction to accounting estimates
- 0:35 Auditing accounting estimates and key procedures
- 1:41 Common misconceptions about auditor responsibilities
- 3:03 Toad Holdco scenario and receivables risk
- 4:02 Substantive procedures for assessing recoverability
About this lesson
This video covers common examples like provisions for doubtful debts and asset useful lives, then walks you through the key audit procedures auditors use to challenge management's estimates—including reviewing assumptions, comparing prior year estimates to actual results, and examining post-year-end events. Essential for understanding the audit approach to high-risk areas in AA and other audit modules.
Duration: 6m
Transcript
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