PCAOB Staff Report Shares Reminders, Good Practices, and Other Considerations for Audit Firms Using the Work of Specialists

Today, the PCAOB released a new staff Spotlight report, “Considerations for Audit Firms Using the Work of Specialists.”

As financial reporting frameworks continue to evolve, there has been a rise in the frequency and significance of the use of the work of specialists in financial reporting and auditing. Specialists are more frequently needed because accounting estimates have become both more prevalent and significant, particularly estimates of fair value.

• Companies may use company specialists to assist them in developing accounting estimates, including fair value measurements, or to evaluate characteristics of physical assets, among other things.
• Auditors increasingly use the work of specialists in their audits to assist in obtaining and evaluating audit evidence.

If a specialist’s work is not properly overseen or evaluated by the audit firm, there may be a heightened risk that the audit firm’s work will not be sufficient to detect a material misstatement in the financial statements.

This Spotlight highlights recent staff observations that are designed to help audit firms ensure appropriate procedures are performed when using the work of a specialist. Topics covered include the following:

• Evaluating the work of a company specialist
• Using the work of an auditor-employed specialist
• Using the work of an auditor-engaged specialist
• Common deficiencies related to use of specialists
• Reminders for audit firms
• Good practices
• Questions that may be of interest to audit committees to consider about the work performed by the audit firm related to the use of specialists

Visit the PCAOB’s Staff Publications page for more resources on the PCAOB's activities and observations.

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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.

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