Auditing Estimates, Related Parties, and Other Special Matters

This chapter covers areas where standard audit procedures require stronger judgment or specialized support. Estimates, related-party activity, legal contingencies, and going-concern issues often create the hardest evidence and reporting decisions in AUD.

In This Chapter

• Auditing Accounting Estimates, Provisions, and Contingencies explains how uncertain measurements are evaluated.
• Auditing Related Parties, Transactions, and Disclosure covers detection, substance, and reporting issues around related-party activity.
• Auditing Legal Claims and Litigation Contingencies focuses on legal exposure and supporting evidence from counsel.
• Evaluating Going Concern and Substantial Doubt addresses substantial-doubt analysis and related reporting.
• Using the Work of an Auditor’s Specialist explains when specialist support is needed and how that work is evaluated.

How to Use This Chapter

• Read this chapter after the main substantive-testing chapter because these areas often extend that work.
• Focus on why these matters require more judgment, corroboration, or specialist involvement.
• Return here whenever an AUD question involves uncertainty, disclosure sensitivity, or reliance on expert work.

In this section

• Auditing Accounting Estimates, Provisions, and Contingencies
  How auditors evaluate management estimates, provisions, and contingencies for reasonableness and bias.
• Auditing Related Parties, Transactions, and Disclosure
  How auditors identify related parties, test related-party transactions, and evaluate disclosures.
• Auditing Legal Claims and Litigation Contingencies
  How auditors assess legal claims, litigation contingencies, and supporting evidence from counsel.
• Evaluating Going Concern and Substantial Doubt
  How auditors evaluate going concern, management plans, and substantial-doubt reporting.
• Using the Work of an Auditor's Specialist
  How auditors evaluate and use the work of specialists in high-judgment audit areas.