PCAOB adds implementation pages on new standards
The Public Company Accounting Oversight Board posted two new pages to its website to help implement some of its standards and amendments that have recently been approved by the Securities and Exchange Commission.
One of the pages is for the new auditing accounting estimates standard and the other is for amendments to a standard on the auditor’s use of the work of specialists.
The new standard for auditing accounting estimates, including fair value measurements, replaces three earlier PCAOB standards by establishing a single standard that offers a uniform, risk-based approach. It stresses that auditors have to apply professional skepticism, including addressing potential management bias, when they are auditing accounting estimates. The new standard for auditing accounting estimates also provides more direction on addressing some of the aspects that happen to be unique to auditing fair values of financial instruments, including the use of pricing information from third parties such as pricing services and brokers or dealers.
The other page deals with the auditor’s use of the work of specialists. It strengthens the requirements for evaluating the work of a company's specialists, whether they’re employed or engaged by the company. The amendments aim to increase the attention paid by auditors to areas where a specialist is used and to align the requirements with the PCAOB's risk assessment standards. They take a supervisory approach to both auditor-employed and auditor-engaged specialists.
The new pages function as a resource for auditors and other interested parties. They include information such as fact sheets and rulemaking dockets, along with PCAOB and SEC releases.