PCAOB Issues Report Analyzing the Impact of Estimates and Specialists Requirements on Key Stakeholders

Today, the Public Company Accounting Oversight Board (PCAOB) released an interim post-implementation review report addressing the initial impact of our requirements, adopted in 2018, related to auditing accounting estimates and the auditor’s use of the work of specialists. The report and accompanying staff white papers providing additional technical information are available at the following links:

• Interim Analysis Report: Evidence on the Initial Impact of New Requirements for Auditing Accounting Estimates and Auditor’s Use of the Work of Specialists(PDF)
• Staff White Paper: Stakeholder Outreach on the Initial Implementation of Estimates and Specialists Audit Requirements(PDF)
• Staff White Paper: Econometric Analysis on the Initial Implementation of the New Specialists Requirements(PDF)

Modernizing standards is one of four key strategic goals for the PCAOB. In pursuit of this goal, the Board has set one of the most ambitious standard-setting agendas in PCAOB history. Given these efforts, the role of robust economic analysis in standard setting is more important than ever for the PCAOB. Post-implementation reviews are an important component of high-quality economic analysis that the PCAOB conducts as part of standard setting to ensure that PCAOB standards are working effectively to enhance audit quality and protect investors.

The staff findings suggest that the new requirements improved auditing practices in some instances and did not result in significant increases in audit hours or audit fees. There is also no evidence of unintended consequences from auditors’ initial implementation of the new requirements. The Board plans to continue to monitor the implementation of the new requirements and their impact on the quality of audit services, as well as on audit committees, preparers, and audit firms.

More information about the PCAOB’s post-implementation review is available on our website.

*****

About the PCAOB

The PCAOB is a nonprofit corporation established by Congress to oversee the audits of public companies in order to protect investors and further the public interest in the preparation of informative, accurate, and independent audit reports. The PCAOB also oversees the audits of brokers and dealers registered with the Securities and Exchange Commission, including compliance reports filed pursuant to federal securities laws.