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PCAOB Proposes to Strengthen Requirements for an Auditor’s Use of the Work of Specialists

  • PCAOB (US Public Company Accounting Oversight Board) (dark gray) Image

Jun 01, 2017

On June 1, 2017, the Public Company Accounting Oversight Board (PCAOB) issued for public comment a proposal to strengthen requirements that would apply when auditors use the work of specialists in an audit. The Board requests public comment on its proposal by August 30, 2017.

The proposal is intended to further investor protection by strengthening the requirements for evaluating the work of a specialist employed or engaged by the company and applying a risk-based approach to supervising and evaluating the work of a specialist employed or engaged by the auditor.

The proposal would make the following changes, among others, to existing requirements:

For use of the work of a company's specialist:

  • Supplement current requirements in AS 1105 to address circumstances when the auditor uses the work of a company specialist as audit evidence;
  • Align requirements with those in the companion proposal on auditing accounting estimates, including fair value measurements; and,
  • Remove from the scope of AS 1210 requirements for using the work of a company's specialist as audit evidence.

For use of the work of an auditor's specialist:

  • Enhance the requirements for applying a risk-based supervisory approach to auditor-employed specialists, and extend those requirements to auditor-engaged specialists;
  • Add requirements for informing the auditor's specialist of the work to be performed and for reviewing and evaluating that specialist's work;
  • Amend the requirements for assessing the knowledge, skill, and ability of an auditor's specialist; and,
  • Amend the requirements for assessing the objectivity of an auditor-engaged specialist to describe objectivity as the ability to exercise impartial judgment on all issues encompassed by the specialist's work in the audit.

Review the press release on the PCAOB's website.

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