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Correction
Professional judgment applies relevant requirements to evidence and explains how the conclusion follows. Experience can guide inquiry, but preference alone cannot support an accounting result.
Build a reviewable record
Define the decision, reporting date, entity, and governing requirements. Separate observed facts from assumptions. Evaluate corroborating and contrary evidence, compare reasonable alternatives, and identify incentives that could bias the process. Record why the selected conclusion fits the criteria and what new evidence would cause it to change.
Suppose an accountant estimates warranty cost from last year's repair rate. The arithmetic can be correct while the judgment is weak if current products have a known defect or contract terms changed. Conversely, later repair costs can differ from a sound estimate because uncertainty existed at the reporting date. Hindsight alone does not decide whether the original process was sound.
Check your answer
Ask whether another qualified reviewer can reconstruct the question, authority, facts, assumptions, alternatives, contrary evidence, and conclusion. A citation without application is incomplete. An amount inside a possible range is not automatically supportable. Explain why that amount best represents the evidence available for the stated date.
When this mistake may appear
- More than one estimate or method appears possible.
- An experienced manager gives a conclusion without a reviewable record.
Your work may contain this mistake if:
- Selects the answer management prefers and documents only favorable evidence.
- Uses experience without applicable criteria or current facts.
- Treats uncertainty as permission to choose any amount in a range.