Auditor's Use of the Work of Specialists

What Was Changed

The amendments adopted by the Board strengthen the requirements for evaluating the work of a company's specialist, whether employed or engaged by the company. They are designed to increase audit attention in areas where a specialist is used and to align the applicable requirements with the PCAOB's risk assessment standards.

The amendments also apply a supervisory approach to both auditor-employed and auditor-engaged specialists. 

The Board amended two existing auditing standards, AS 1105, Audit Evidence, and AS 1201, Supervision of the Audit Engagement. The Board retitled and replaced AS 1210, Using the Work of a Specialist, with a new AS 1210, Using the Work of an Auditor-Engaged Specialist.

Additional information on these amendments: 

• SEC Action: Release No. 34-86270
• Auditing Standard:  AS 1210, Using the Work of an Auditor-Engaged Specialist;  AS 1105, Audit Evidence;  AS 1201, Supervision of the Audit Engagement
• Adopting Release: PCAOB Release No. 2018-006
• Fact Sheet: Adoption of Amendments on the Auditor’s Use of the Work of Specialists
• Project History: Auditor's Use of the Work of Specialists

Why Did the PCAOB Adopt This Standard?

The use of the work of specialists continues to increase in both frequency and significance. 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.

The amendments are also designed to be risk-based and scalable so that the auditor's work to evaluate the specialist's work is commensurate with the risk of material misstatement.

These amendments should lead to more uniformly rigorous practices among audit firms of all sizes and enhance audit quality and the credibility of information provided in financial statements.

What Are the Effective Dates?

The amendments are effective for audits of fiscal years ending on or after December 15, 2020.

Staff Guidance

The PCAOB staff provides guidance that highlights aspects of new requirements that apply when auditors use the work of specialists in an audit and when an auditor uses the work of a company specialist as audit evidence.

• Supervising or Using the Work of an Auditor's Specialist (Aug. 22, 2019)
  
• Using the Work of a Company’s Specialist (Aug. 22, 2019)

Staff Presentation (May 2020)

The PCAOB staff produced a video on the implementation of Auditor’s Use of the Work of Specialists. 

We welcome your feedback and questions. After you've watched the video, please  compete this short survey. 

The PCAOB released an interim analysis report and two accompanying white papers in 2022 analyzing the initial impact of the new requirements for auditing accounting estimates and using the work of specialists.

To inform the analysis, the staff conducted extensive stakeholder outreach and large-sample statistical analysis. The staff’s stakeholder outreach included surveys and targeted interviews of auditors, preparers, and audit committee chairs.

Further information on the interim analysis is available on the estimates and specialists post-implementation review page. 

Because some of the effects of the new requirements may take several years to fully manifest or stabilize, the PCAOB will continue to evaluate the timeline for developing any more comprehensive post-implementation review. Potential future analyses would further evaluate the benefits and costs of the new requirements, including any unintended consequences, to understand the overall impact on the auditors, public companies, and users of financial statements.