The Public Company Accounting Oversight Board (PCAOB) has adopted guidelines regarding accounting estimate auditing and requirements that apply when auditors use the work of specialists in an audit.
PCAOB officials recently unveiled a new standard PDF designed with the overarching goal of bolstering fair value measurements in addition to a measure strengthening guidelines aiding auditors in their work with industry professionals.
“The Board’s action comes after thoughtful analysis and extensive external engagement on the prevalent use of accounting estimates and the auditor’s use of the work of specialists, recognizing that these are both challenging areas of the audit that needed to be addressed,” William D. Duhnke III, PCAOB chairman, said. “These two standard-setting projects align with the PCAOB’s strategic priorities by enhancing our efforts to protect investors and strengthen auditing practices.”
Officials said the new estimates standard, as well as the amendments, are subject to Securities and Exchange Commission approval and would be effective for financial statement audits for fiscal years ending on or after Dec. 15, 2020. Both standard-setting projects apply to audits conducted under PCAOB protocols.
Project historical references can be accessed via Rulemaking Docket 043 for the estimates standard and Rulemaking Docket 044 for the amendments, per the PCAOB. Fact sheets on the new estimates standard and amendments also provide additional information and resources.