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Auditing Accounting Estimates – IAASB

Date recorded:

At its meeting on June 18-23, 2018, the IAASB approved ISA 540 (Revised) as a final standard. The revised ISA will be effective for audits of financial reporting periods beginning on or after December 15, 2019. Early adoption is permitted and encouraged, and the final IAASB-approved text has been posted on the IAASB’s website. Once the Public Interest Oversight Board’s (PIOB) confirmation that due process was followed is received, the Board will formally release the standard. In finalizing ISA 540 (Revised), the Board focused on the scalability of the ISA to very simple accounting estimates as well as the most complex accounting estimates. The Board also clarified the relationship between ISA 540 (Revised) and other ISAs, and using the work of a management’s expert as audit evidence in testing how management made the accounting estimate. The Board recognized that support of the implementation of ISA 540 (Revised) is important and therefore supported the formation of an implementation working group. The Board will monitor implementation challenges as they arise and also committed to a post-implementation review.

Review the summary, including the podcast, on the IAASB's Web site.

Review the summary, including the podcast, on the IAASB's Web site.

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