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Deloitte comments on PCAOB's proposal on auditing accounting estimates

Published on: Sep 08, 2017

Deloitte & Touche LLP comments on the PCAOB's proposed Auditing Standard "Auditing Accounting Estimates, Including Fair Value Measurements" and proposed amendments to PCAOB auditing standards, which were issued in June 2017.

An excerpt from the comment letter is shown below:

We support the Board’s efforts to enhance the standards of the PCAOB that address auditing accounting estimates, including fair value measurements, and to align the applicable requirements with the PCAOB’s risk assessment standards. We commend the Board for developing a single standard on auditing accounting estimates and fair value measurements to replace the existing standards. We also agree with the PCAOB that the Proposed Auditing Standard achieves better integration and alignment with the PCAOB’s risk assessment standards, and are pleased that the Proposed Auditing Standard retains the three approaches in the existing standards for testing accounting estimates.

We believe that the PCAOB’s efforts in considering amendments to the standards addressing auditing accounting estimates, including fair value measurements along with the Specialists Proposal is thoughtful and appropriate. These concurrent proposals allow commenters to better evaluate and analyze the effect of such proposed amendments, both individually and collectively, and for the PCAOB to consider the feedback collectively as well. We continue to believe it will be important that any resulting amendments pertaining to these two proposals become effective at the same time. We recommend that the effective date should provide auditors with a period of at least two years from the time the standard is approved by the SEC, as we believe there could be significant efforts for accounting firms to undertake in order to properly prepare to implement these requirements. We also commend the PCAOB Staff and Board Members for devoting a significant portion of the June 1, 2017, Open Board Meeting to Consider Adopting Standard on the Auditor’s Report, and Proposing Updated Requirements for Auditing Accounting Estimates and an Auditor’s Use of the Work of Specialists (“Open Meeting”) to discussing matters relevant to the Proposal.

For more information, see the full text of the comment letter which is available below.

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