By Amanda Maine, J.D. The PCAOB has unanimously adopted standards on auditing accounting estimates and the auditor’s use of the work of specialists. The new standards, which were adopted in tandem, were a priority of the new Board and are the first substantive auditing standards finalized since the full Board was seated in April 2018. According to Chairman William Duhnke, the staff engaged in “thoughtful analysis and extensive external engagement” in recognition of these challenging areas of the audit that needed to be addressed. Estimates. The new standard on the auditing of accounting estimates, including fair value measurements, emphasizes the need to apply professional skepticism when auditing accounting estimates, especially when it comes to potential management bias. Acting Chief Auditor Barbara Vanich noted that by their nature, accounting estimates involve complex judgments that make them susceptible to management bias. Assistant Chief Auditor…
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