CAF-8 · Chapter 10 · Question 1 of 10
When auditing 'Provisions' (e.g., for a pending legal case), the auditor's primary concern under IAS 37 is whether:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) There is a present obligation as a result of a past event, a probable outflow of resources, and a reliable estimate can be made.
Explanation
These three criteria are the fundamental recognition requirements for a provision under IAS 37 (Provisions, Contingent Liabilities and Contingent Assets).
More Substantive Procedures: Other Areas MCQs
- Q3To obtain evidence about a pending legal claim against the client, the auditor should primarily:
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