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Auditing Standard ASA 540 Auditing Accounting Estimates and Related Disclosures
Indicators of Possible Management BiasIndicators of Possible Management Bias
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Indicators of Possible Management Bias
- The auditor shall evaluate whether judgements and decisions made by management in making the accounting estimates included in the financial report, even if they are individually reasonable, are indicators of possible management bias. When indicators of possible management bias are identified, the auditor shall evaluate the implications for the audit. Where there is intention to mislead, management bias is fraudulent in nature. (Ref: Para. A133–A136)