Respond to each of the following questions regarding the auditing of estimates:

Why does the audit of significant accounting estimates consume such a high degree of attention in the audit process? What factor concerning management's role in the making and supporting significant accounting estimates is most worrisome to the auditor? Explain your answer.

What factors contributes to giving an accounting estimate an inherently higher risk rating? Explain your answer.

List and briefly describe three different approaches you might take to auditing a significant estimate after you have consulted with AU-C 540.