Fact Sheet: Proposal for an Auditor’s Use of the Work of Specialists

June 1, 2017

The Public Company Accounting Oversight Board issued for public comment a proposal to strengthen the requirements that would apply when auditors use the work of specialists in an audit.

The proposal calls for auditors to devote more attention to areas of the audit where a specialist's work is used. It also aligns applicable requirements for using the work of specialists with the PCAOB's risk assessment standards. The proposal is open for public comment through August 30, 2017.

What is Being Proposed?

The Board is proposing to amend two existing auditing standards, Audit Evidence (AS 1105) and Supervision of the Audit Engagement (AS 1201). The proposal also would replace Using the Work of a Specialist (AS 1210) and retitle it, Using the Work of an Auditor-Engaged Specialist (AS 1210).

The proposal is intended to further investor protection by making changes to the requirements for using the work of both a company's specialist and an auditor's specialist that will:

  • Strengthen requirements for evaluating the work of a company's specialist; and,
  • Apply a risk-based approach to supervising and evaluating the work of both auditor-employed and auditor-engaged specialists.

The proposed changes may improve the auditor's ability to detect material misstatements in the financial statements and promote an improved, uniform approach to the supervision of an auditor's specialists.

Summary of Proposed Changes

The proposal would make the following changes, among others, to existing requirements:

For use of the work of a company's specialist:

  • Supplement current requirements in AS 1105 to address circumstances when the auditor uses the work of a company specialist as audit evidence;
  • Align requirements with those in the companion proposal on auditing accounting estimates, including fair value measurements; and,
  • Remove from the scope of AS 1210 requirements for using the work of a company's specialist as audit evidence.

For use of the work of an auditor's specialist:

  • Enhance the requirements for applying a risk-based supervisory approach to auditor-employed specialists, and extend those requirements to auditor-engaged specialists;
  • Add requirements for informing the auditor's specialist of the work to be performed and for reviewing and evaluating that specialist's work;
  • Amend the requirements for assessing the knowledge, skill, and ability of an auditor's specialist; and,
  • Amend the requirements for assessing the objectivity of an auditor-engaged specialist to describe objectivity as the ability to exercise impartial judgment on all issues encompassed by the specialist's work in the audit.


Many companies employ or engage specialists – such as engineers – to provide information used in the preparation of financial statements. Auditors often use the work of company specialists as audit evidence. Auditors also may employ or engage their own specialists to assist in obtaining and evaluating audit evidence.

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

Auditors use the work of specialists, among other things, to assist in testing the company's process to develop an accounting estimate. In a companion release, the PCAOB is proposing to replace its existing standards on auditing accounting estimates and fair value measurements with a single standard that establishes a uniform, risk-based approach designed to strengthen and enhance the requirements for auditing accounting estimates, including fair value measurements.

Project History

As part of the research and outreach leading up to this proposal on the use of the work of specialists, the PCAOB:

  • Issued for public comment Staff Consultation Paper No. 2015-01, The Auditor's Use of the Work of Specialists, in May 2015; and,
  • Discussed the paper and public comments on the staff consultation paper at meetings of the Standing Advisory Group in November 2016, June and November 2015, and at a meeting of the Investor Advisory Group in September 2015.