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Do you have any concern about this change in estimate

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Question - Your client reports preliminary financial results showing a 15% growth in earnings. This growth meets earlier predictions by management. In your audit, you discover management reduced its allowance for uncollectible accounts from 5% to 2% of gross accounts receivable. Absent this change, earnings would show 9% growth. Do you have any concern about this change in estimate? Explain why or why not from the viewpoint of the auditor for the client. What incentive does management have, if any, to change the estimate?

Reference no: EM132998588

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