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ASA 540 - Audit of Accounting Estimates - April 2006
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Main Features
This Auditing Standard establishes mandatory requirements and provides explanatory guidance on the audit of accounting estimates contained in a financial report. This Auditing Standard requires the auditor to:
(a) design and perform audit procedures responsive to the risk of material misstatement of an entity’s accounting estimates;
(b) evaluate the results of audit procedures; and
(c) obtain management representation on the reasonableness of significant assumptions used in making accounting estimates.