PCAOB Staff Provides Guidance for New Requirements on Auditing Estimates & Auditor’s Use of the Work of Specialists

The Public Company Accounting Oversight Board today released four staff guidance documents to raise awareness and assist auditors in advance of the effective date of new estimates and specialists audit requirements. The requirements are effective for audits of financial statements for fiscal years ending on or after December 15, 2020. 

“Accounting estimates and using the work of specialists are both prevalent areas of the audit,” said Chairman William D. Duhnke. “As auditors begin to plan and perform work on audits subject to new requirements in these areas, we are committed to proactively providing resources to them and supporting effective implementation.”

The staff guidance consists of:

  1. Auditing Accounting Estimates
  2. Auditing the Fair Value of Financial Instruments
  3. Supervising or Using the Work of an Auditor's Specialist
  4. Using the Work of a Company’s Specialist 

The first two documents highlight aspects of the new standard and enhancements made to integrate the Board’s risk assessment requirements when auditing accounting estimates, including fair value measurements. The other two documents highlight aspects of new requirements that apply when auditors use the work of specialists in an audit and when an auditor uses the work of a company specialist as audit evidence. 

As outlined on the implementation webpages for the new estimates standard and amendments for the auditor’s use of the work of specialists, the PCAOB is utilizing a variety of avenues to provide useful information to auditors. The Board and staff will continue to monitor firms’ implementation efforts and determine if further guidance is needed.