PCAOB Releases Consistent Approach to Auditing Accounting Estimates
In its first standard-setting move since undergoing a complete leadership change early last year, the Public Company Accounting Oversight Board (“PCAOB”) unanimously approved a standard to improve audits of accounting estimates. Issued as Release No. 2018-005, Auditing Accounting Estimates, Including Fair Value Measurements, the standard provides auditors a more consistent approach to auditing accounting estimates. Previously, auditors used three standards to audit estimates: Auditing Standard (“AS”) 2501, Auditing Accounting Estimates; AS 2502, Auditing Fair Value Measurements and Disclosures; and AS 2503, Auditing Derivative Instruments, Hedging Activities, Investments in Securities. While the standards employ a common approach to testing estimates, they differ in explaining the. Read More.