Ministry of Finance, Specific Independent Audit Guidelines No.25 - Accounting Estimates

Issued: January 21 2001
Effective: July 1 2001
Applicability: The Guidelines tentatively apply to the auditing of the accounting statements of listed companies by registered accountants.

Main contents: The Guidelines state that in auditing the accounting estimates of an entity, a registered accountant shall comply with the principles of independent auditing, and obtain sufficient and appropriate audit evidence to determine whether the accounting estimates of the entity are reasonable and whether their disclosure is appropriate (Article 4). In terms of procedures, the Guidelines stipulate that the auditor may review and test the process for deriving the accounting estimates, or compare such estimates with independent estimates, or review the estimates in light of post-period facts (Article 7). At the end of the auditing procedures, the auditor shall make a final determination as to the reasonableness of the estimates (Article 21).
Related legislation: Ministry of Finance, Independent Audits Basic Guidelines