The Public Company Accounting Oversight Board has released for public comment a staff consultant paper on standard-setting related to auditing accounting estimates and fair value measurements.
The board’s inspection staff continues to identify numerous audit deficiencies in a variety of types of estimates across audit firms of different sizes. The PCAOB Office of the Chief Auditor is seeking comment on current audit practice, the possible need for changes to board standards, and possible alternatives related to auditing accounting estimates and fair value measurements.
"The Staff Consultation Paper raises questions about issues concerning the auditing of accounting estimates and fair value measurements, a matter that the staff have been working on for some time," said PCAOB chief auditor and director of professional standards Martin Baumann. "The public comments we receive on this paper will help to properly inform our analysis regarding a potential proposal for a new auditing standard."
The paper describes the staff’s preliminary views on a potential approach to changing the board’s existing standards.
"Accounting estimates and fair value measurements can be subjective and complex, yet they can be an important part of a company's financial statements and critical to investors' decision-making," said PCAOB Chairman James Doty. "The PCAOB and foreign audit regulators have identified compliance with auditing requirements related to fair value measurements as an area of continued concern, and I support the staff's outreach efforts in this important area."
The PCAOB also announced that it will hold a Standing Advisory Group meeting on October 2, in Washington, D.C., to discuss related issues.
The staff paper is available online, and includes specific questions for commenters. Comments can be submitted by postal mail or e-mail, and should be sent to the Office of the Secretary, PCAOB, 1666 K Street NW, Washington, DC 20006, or to firstname.lastname@example.org.
All comments should refer to Staff Consultation Paper, Auditing Accounting Estimates and Fair Value Measurements, in the subject line, and should be received by the PCAOB no later than Nov. 3, 2014. All comments will be made public.