Auditing Accounting Estimates, Including Fair Value Measurements

(Updated Dec. 11, 2018)


Strengthen and enhance requirements for auditing estimates, including fair value measurements. This project is a companion to the project on the auditor's use of the work of specialists.

Most Recent Action

Proposed replacing the Board's existing standards on auditing accounting estimates and fair value measurements with a single standard, proposed standard AS 2501, Auditing Accounting Estimates, Including Fair Value Measurements, and amending the risk-assessment standards to more specifically address certain aspects of auditing accounting estimates. The proposal emphasizes that auditors need to apply professional skepticism and devote greater attention to potential management bias when auditing accounting estimates. The proposed standard also would include a special topics appendix that addresses certain matters relevant to auditing the fair value of financial instruments, including the use of information from pricing services.


Accounting estimates are becoming more prevalent and significant as financial reporting frameworks evolve and require greater use of estimates, including those based on fair value measurements. They are some of the areas of greatest risk in the audit, requiring additional audit attention and appropriate application of professional skepticism. Auditing accounting estimates has proven challenging for auditors.


The PCAOB will hold an open meeting on December 20, 2018 to consider enhanced requirements for auditing estimates, including fair value measurements.