Final answer:
Auditing accounting estimates is typically approached through Substantive Testing and Analytical Procedures, with the former focused on directly verifying transactions and balances, and the latter based on comparing estimates to expected values derived from the auditor's understanding of the client's business.
Step-by-step explanation:
The basic approaches to auditing accounting estimates include Substantive Testing and Analytical Procedures. Substantive testing is a direct testing of transactions and balances to validate the correctness of accounting estimates. This may involve examining documentation, verifying calculations, and evaluating the assumptions used in making the estimates. Analytical procedures involve comparing estimates to expected amounts, based on the auditor's understanding of the entity and its environment.
Compliance Testing and Internal Control Evaluation are not directly associated with testing accounting estimates but rather with testing the effectiveness of an entity's internal controls. On the other hand, Confirmations and External Verification are generally used to verify specific information or transactions with external parties. Lastly, Judgmental Testing and Sampling Techniques can be part of both substantive and control testing but are not approaches specifically focused on auditing accounting estimates.