Final answer:
Confirming the amounts is not an approach to auditing an accounting estimate because estimates predict future events and lack specific transactions that can be confirmed. Option A
Step-by-step explanation:
The question relates to auditing an accounting estimate. In auditing, there are various approaches to evaluate the reasonableness and accuracy of accounting estimates provided by management. However, not all methods are appropriate for auditing estimates. Auditors typically use the following approaches:
Review and test management's process for developing the estimate.
Develop an independent estimate to compare against management's figure.
Review subsequent transactions that may provide evidence about the estimate.
However, confirming the amounts directly as an approach is not practical since estimates are predictions of future events and do not necessarily represent transactions that have occurred, hence they cannot be confirmed in the same way as actual balances. In conclusion, confirming the amounts is not an approach to auditing an accounting estimate. Option A