IAASB guidance on accounting estimates

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29 Jun, 2020

The International Auditing and Assurance Standards Board (IAASB) has released COVID-19 pandemic-related guidance on auditing accounting estimates and related disclosures.

Auditing Accounting Estimates in the Current Evolving Environment Due to COVID-19 notes that management is responsible for the recognition and measurement of accounting estimates and related disclosures in accordance with the applicable financial reporting framework. As financial reporting frameworks often require forward-looking information and yet the COVID-19 pandemic comes with a lot of uncertainties, it will likely be more difficult for management to develop accounting estimates, in particular future cash flows. The COVID-19 pandemic could also result in triggers for impairment testing. Therefore, the IAASB notes, auditors will need to focus on the potential impacts of volatility and uncertainty when auditing accounting estimates.

Please click to access the guidance on the IAASB website.

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