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IAASB Exposure Draft – Auditing Accounting Estimates and Related Disclosures (Proposed amendments to ISA 540)

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Apr 20, 2017

On April 20, 2017, the International Auditing and Assurance Standards Board (IAASB) issued an Exposure Draft on ISA 540 (Revised). Significant changes in how auditors evaluate accounting estimates and related disclosures have been proposed. Stakeholders are invited to provide comments by August 1, 2017.

This proposed standard:

  • enhances requirements for risk assessment procedures to include specific factors related to accounting estimates, namely complexity, judgment, and estimation uncertainty;
  • sets a more detailed expectation for the auditor’s response to identified risks related to accounting estimates, including augmenting the auditor’s application of professional skepticism; and
  • is scalable regardless of the size or sector of the business or audit firm.\

Review the Exposure Draft on the IAASB's Web site.

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