The Public Company Accounting Oversight Board (PCAOB) released last week staff guidance documents to raise awareness and assist auditors in advance of the effective date of new estimates and specialist audit requirements.
The four guidelines stem from requirements effective for audits of financial statements for fiscal years ending on or after Dec. 15, 2020.
“Accounting estimates and using the work of specialists are both prevalent areas of the audit,” PCAOB Chairman William D. Duhnke said. “As auditors begin to plan and perform work on audits subject to new requirements in these areas, we are committed to proactively providing resources to them and supporting effective implementation.”
The guidance consists of Auditing Accounting Estimates, Auditing the Fair Value of Financial Instruments, Supervising or Using the Work of an Auditor’s Specialist and Using the Work of a Company’s Specialist, officials said, noting the initial pair of documents highlight aspects of the new standard and enhancements made to integrate the Board’s risk assessment requirements when auditing accounting estimates, including fair value measurements.
The other two documents highlight new requirements applied when auditors use the work of specialists in an audit and when an auditor uses the work of a company specialist as audit evidence.
PCAOB officials said the organization and staff would continue to monitor firms’ implementation efforts and determine if further guidance is needed.
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