PCAOB Approves Standard for Auditor’s Use of Specialists
Last month, the Public Company Accounting Oversight Board (“PCAOB”) published a final standard aimed to strengthen the requirements for an auditor’s use of specialists. Release No. 2018-006, Amendments to Auditing Standards for Auditor’s Use of the Work of Specialists, improves how an auditor uses the work of specialists and reinforces the provisions necessary for reviewing the work of an organization’s specialist. The revised standard also aligns with the PCAOB’s risk assessment standards. Specifically, an auditor must now test the suitability of an organization’s data, as well as the significant assumptions and methods applied. PCAOB member Duane DesParte noted that the amendments. Read More.
CAQ Board Issues Four Grants for Auditing Research
The Center for Audit Quality’s (“CAQ”) Research Advisory Board grant program recently announced it will fund the following academic research projects focused on how audits are conducted: “How Can Audit Committee Support Improve Auditors’ Application of Professional Skepticism?” by Joseph F. Brazel (North Carolina State University), Anna Gold (Vrije Universiteit Amsterdam), and Tammie Schaefer (University of Missouri – Kansas City) “‘Alexa, Audit Loan Grades’: Enhancing Auditor Reliance on Artificial Intelligence Through Anthropomorphism” by Sean Dennis and Benjamin P. Commerford (University of Kentucky) “Encouraging Relational Thinking to Enhance Auditor Use of Audit Data Analytics Output” by Cassandra Estep, Bright Hong, and. Read More.
PCAOB Members Say Standard-Setting Projects to be Completed
The new Public Company Accounting Oversight Board (“PCAOB”) members say it is probable that some of the projects on the previous board’s standard-setting agenda will be finished. At this week’s meeting with the Standing Advisory Group, PCAOB chairman William Duhnke said that board members are currently reviewing its agenda and working to ensure that existing projects will remain intact. Duhnke noted that before moving forward, however, the PCAOB needs to complete an evaluation of its standard-setting agenda and discuss which projects will receive priority. Significant work has already been completed on three standard-setting projects. Last June, the PCAOB issued Release No. 2017-002, Proposed Auditing Standard—Auditing Accounting Estimates, Including Fair Value Measurements and Proposed Amendments to PCAOB. Read More.
Data Collection Form Revisions Proposed
In a Federal Register notice issued on April 3, the Federal Audit Clearinghouse (“FAC”) is proposing amendments to the Data Collection Form (“DCF”). Titled Proposed Information Collection; Comment Request; Data Collection Form for Reporting on Audits of States, Local Governments, Indian Tribes, Institutions of Higher Education, and Non-Profit Organizations , the notice outlines four significant changes to the Data Collection. The final Form changes would be effective for fiscal periods ending in 2019, 2020 and 2021. Those proposed changes include: Expanding the audit finding information that auditors include in the DCF to contain the audit finding’s actual text; Asking auditors to state whether they sent a written communication to the auditee concerning any non-audit finding issues should be directed to those responsible for governance matters;. Read More.
PCAOB Proposal to Address Auditing Accounting Estimates
A new proposal by the Public Company Accounting Oversight Board (“PCAOB”) seeks to strengthen the applicable requirements for auditing accounting estimates. Issued as Proposed Auditing Standard for Auditing Accounting Estimates, Including Fair Value Measurements, the proposal advises auditors to use professional skepticism and give added attention to possible management bias while auditing accounting estimates. Auditors have had issues auditing some accounting estimates, causing PCAOB inspectors to flag deficiencies at both small and large audit firms. Such deficiencies have raised concerns on auditors’ application of professional skepticism and their consideration of possible management bias. In response, the PCAOB proposes a new. Read More.
Topics: and Investments in Securities (AS 2503), Auditing, Auditing Accounting Estimates (AS 2501), Auditing Derivative Instruments, Auditing Fair Value Measurements and Disclosures (AS 2502), Fair Value Measurements, Hedging Activities, PCAOB, Public Company Accounting Oversight Board "PCAOB"