Accounting estimates are at the centre of modern audits, often involving significant judgement, complexity, and uncertainty. ISA 540 sets out the auditor’s responsibilities for evaluating accounting estimates and related disclosures to ensure they are reasonable and free from bias. Throughout this course, you’ll revisit key concepts, explore inherent risk factors, learn how to respond to and document estimation risks, and understand the role of professional scepticism in enhancing audit quality. You’ll also study real-world examples, communication challenges, and recent developments that have influenced audit judgments in areas such as fair-value measurement, expected credit losses, and post-pandemic economic uncertainty.

Upon completion of this course, learners will be able to:

• Explain the principles and objectives of ISA 540 (Revised) in auditing accounting estimates and related disclosures.
• Identify and assess inherent risk factors, including estimation uncertainty, complexity, and subjectivity.
• Design and perform appropriate audit procedures to respond to identified estimation risks.
• Evaluate management’s methods, assumptions, and data for reasonableness and potential bias.
• Apply professional scepticism and effective communication when auditing complex estimates.
• Adopt and implement effective strategies to enhance audit documentation and quality.