Some of the items on the balance sheet are based on estimatedinformation. Consider management’s responsibility when it comes tothe use of estimates (e.g., net realizable value of receivables,valuation of inventories, accumulated depreciation, etc).1.Describe the incentives management has to misrepresent estimates.2.With the core value of integrity in mind, discuss controls andprocedures companies can put in place to prevent misrepresentationof these estimates.
