[The following paragraph was effective for audits of financial statements for periods beginning on or after January 1, 1989. It was amended, effective for audits of fiscal years beginning on or after December 15, 2010. See PCAOB Release No. 2010-004.

Return to the current version.]


This section provides guidance to auditors on obtaining and evaluating sufficient competent evidential matter to support significant accounting estimates in an audit of financial statements in accordance with generally accepted auditing standards. For purposes of this section, an accounting estimate is an approximation of a financial statement element, item, or account. Accounting estimates are often included in historical financial statements because—

  1. The measurement of some amounts or the valuation of some accounts is uncertain, pending the outcome of future events.
  2. Relevant data concerning events that have already occurred cannot be accumulated on a timely, cost-effective basis.