The Securities and Exchange Commission has approved final standards issued by the Public Company Accounting Oversight Board giving auditors new requirements for auditing estimates, including fair value measurements, and for relying on the work of specialists.
Auditing Standard 2501 replaces three historic standards to give auditors a uniform, risk-based approach for how to audit any number of estimates that management must make in arriving at financial statement assertions. Auditors’ work in auditing estimates is a common area of criticism in PCAOB inspections of major audit firms, which prompted the PCAOB to update its standards in that area.
