What went wrong in the auditor’s risk assessment procedures? Which of the three methods for substantively testing the estimate did the auditor choose? What could or should the auditor have done differently?

Auditing accounting estimates

Read the Case 7.1 Ligand Pharmaceuticals in the Knapp casebook. you will find it in the book. page 433-338

Prepare and submit a 2-3 page paper analyzing the Ligand Pharmaceuticals case.

• What went wrong in the auditor’s risk assessment procedures?
• Which of the three methods for substantively testing the estimate did the auditor choose?
• What could or should the auditor have done differently?

The standard should be used for this case + reading that on the attachment

1. PCAOB AS 2501: Auditing Accounting Estimates, including Fair Value Measurements
2. AICPA Statement on Auditing Standards No. 14