Auditor's Use of the Work of Specialists

(Updated July 2, 2019)

Objective


Strengthen the requirements that apply when auditors use the work of specialists by increasing audit attention in areas where a specialist is used and aligning the applicable requirements with the PCAOB risk-assessment standards. This rulemaking is a companion to the rulemaking on auditing accounting estimates, including fair value measurements.

Most Recent Action


Adopted amendments to the auditing standards regarding the requirements that apply when auditors use the work of specialists in an audit. These amendments include (1) adding an appendix to AS 1105, Audit Evidence, that addresses using the work of a company's specialist; (2) adding an appendix to AS 1201, Supervision of the Audit Engagement, that addresses supervision of an auditor-employed specialist; and (3) retitling and replacing AS 1210, Using the Work of a Specialist, with new AS 1210, Using the Work of the Auditor-Engaged Specialist, which sets forth requirements for using the work of auditor-engaged specialists. The amendments will take effect for audits of financial statements for fiscal years ending on or after December 15, 2020.

Background


The use of specialists has grown in both frequency and significance as the use of fair value measurements and other accounting estimates has increased. If a specialist's work is not properly overseen or evaluated by the auditor, there may be heightened risk that the auditor's work will not be sufficient to detect a material misstatement in accounting estimates. PCAOB oversight activities indicate that there is diversity in practice regarding the use of the work of specialists.

Status


On December 20, 2018, the PCAOB adopted amendments to the auditing standards regarding the requirements that apply when auditors use the work of specialists in an audit. On July 1, 2019, the amendments were approved by the SEC.

View the implementation page on specialists to see how PCAOB supports the implementation of these amendments.