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Accounting Estimates in Financial Statement Audit

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  • Nguyen Trong Co
  • Lam Cao Khanh

Abstract

This study investigates the relationship between the transparency of financial statement disclosures, the complexity of valuation models, and the audit quality of accounting estimates. In the context of International Financial Reporting Standards (IFRS) and the revised International Standard on Auditing (ISA 540), which increasingly emphasize fair value measurement and disclosure, auditors face significant challenges related to uncertainty and the risk of material misstatement in accounting estimates. A synthesis of prior theories and empirical evidence reveals that- (i) transparent disclosures help reduce information asymmetry and enhance auditors' evaluative capacity; (ii) the greater the complexity of valuation models, the more the reliability of audits is challenged; and (iii) audit quality critically depends on professional skepticism, auditors' expertise, and the application of international standards. The study contributes by providing a comprehensive analytical framework for improving audit quality in the context of IFRS adoption in Vietnam.

Suggested Citation

  • Nguyen Trong Co & Lam Cao Khanh, 2025. "Accounting Estimates in Financial Statement Audit," Business and Economic Research, Macrothink Institute, vol. 15(4), pages 119-128, December.
    • Handle: RePEc:mth:ber888:v:15:y:2025:i:4:p:119-128
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    References listed on IDEAS

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    1. Trotman, Ken T. & Bauer, Tim D. & Humphreys, Kerry A., 2015. "Group judgment and decision making in auditing: Past and future research," Accounting, Organizations and Society, Elsevier, vol. 47(C), pages 56-72.
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    Cited by:

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    2. Jin, Yongyun & Jiang, Zixin & Wang, Xuezheng & Dong, Bing, 2026. "Empowering phase change material thermodynamics via physics-consistent neural network-enabled advanced building control," Applied Energy, Elsevier, vol. 404(C).

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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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