PCAOB Issues Proposals to Enhance and Strengthen Requirements for Auditing Accounting Estimates, Including Fair Value, and to Address the Auditor’s Use of the Work of Specialists

Published on: Jun 12, 2017

This Audit & Assurance Update addresses the key provisions of the PCAOB’s June 1, 2017, proposals for changes to its performance standards on auditing accounting estimates, including fair value measurements, and the auditor’s use of the work of specialists.

The PCAOB proposal on auditing accounting estimates, including fair value measurements, strengthens and enhances the requirements for auditing accounting estimates by establishing a single standard. The new proposed standard sets forth a uniform, risk-based approach, and emphasizes the need for the auditor to apply professional skepticism and devote greater attention to potential management bias when auditing accounting estimates.

The PCAOB proposal on the auditor’s use of the work of specialists amends two of its existing auditing standards (Auditing Standard (AS) 1210, Using the Work of a Specialist, and AS 1201, Supervision of the Audit Engagement) to:

  • Strengthen requirements for the auditor to evaluate the work of a company’s specialist, including establishing a uniform, risk-based approach when using the work of a company’s specialist as audit evidence.
  • Apply a risk-based approach to supervising and evaluating the work of both auditor-employed and auditor-engaged specialists.

This publication was released by our US firm.


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