Auditing fair value measurements is important, particularly during stressful economic times when markets may be inactive for financial instruments, such as asset-backed securities and collateralized debt obligations. Fair value measurement principles are used to determine the valuation of certain assets and can be used for the valuation of liabilities.
Below are links to some key documents on this topic.
PCAOB standards provide direction for auditing fair value measurements and disclosures on a financial statement or an integrated audit. Generally, one or more of the following standards apply, in addition to other relevant audit direction in PCAOB standards.
Staff Audit Practice Alerts highlight new, emerging, or otherwise noteworthy circumstances that may affect how auditors conduct audits under the existing requirements of relevant law and PCAOB standards.
The Standing Advisory Group (SAG) meets regularly to advise the Board on auditing and professional practice standard setting. The SAG has had discussions on fair value topics. For more information, see the links below to the SAG briefing papers and archived Webcasts of the discussions.
The PCAOB has formed a task force of the Standing Advisory Group to focus on the auditing of fair value of financial instruments that are not actively traded. The group, known as the Pricing Sources Task Force, will study the use of third-party pricing sources. The Office of Chief Auditor will use the task force findings as it considers whether to develop new standards or guidance. The group is comprised of some SAG members as well as other investors, preparers and auditors, and representatives from pricing services and brokers.