Ankit asked 5 years ago
540 “point estimate” or range to evaluate reasonableness of accounting estimates means?
1 Answers
Ravi Staff answered 5 years ago
when auditor has alternative set of data / assumptions / methods for estimate he computes estimate using his point of view. if he computes a particular amount it is called point estimate if he determines a monetary interval say from 5 lakhs to 8 lakhs it is called range estimate
if managements estimate are close to point or range estimate of auditor then it means management’s estimate are reasonable