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PCAOB Wants to Hear How its Estimates and Specialists Standards are Working

The Public Company Accounting Oversight Board has issued a Request for Comment on the impact of its new standards for auditing accounting estimates and using the work of specialists. This request is part of the PCAOB’s interim analysis of these requirements and consideration of whether additional guidance or other steps may be appropriate. The PCAOB expects to report its findings and to provide insights into the initial impact of the requirements in the fourth quarter of 2022. PCAOB Chair Erica Y. Williams stated: “We welcome input from investors, audit committees, preparers, academics, audit firms, and others who use financial statements.”


In 2018, the Board adopted amendments to its standards for auditing accounting estimates and fair value measurements. The revised standard reflected a risk-based approach to auditing accounting estimates, emphasized the application of professional skepticism (including addressing potential management bias), and provided more direction on issues unique to auditing fair values of financial instruments, including the use of pricing information from third parties. At the same time, the Board adopted amendments to its auditing standards for using the work of a specialist (i.e., a person or firm possessing special skill or knowledge in a particular field other than accounting or auditing). The specialist amendments apply a “risk-based supervisory approach” to both auditor-employed and outside or auditor-engaged specialists. Both sets of amended requirements became effective for audits of fiscal years ending on or after December 15, 2020.


The Request for Comment includes separate sets of questions addressed to (1) investors, and (2) auditors, audit committee members, and financial statement preparers. Examples of questions in the latter category that may be particularly relevant to audit committees include:

  • To what extent did the new requirements have implications for communication and dialog between auditors, audit committees, and preparers? Please describe any changes and associated implications for audit and financial reporting quality.

  • Did audit fees change because of the new requirements? To what extent were any additional fees due to the new requirements versus other contemporaneous environmental factors (e.g., new accounting requirements or the COVID-19 pandemic) that may have influenced audit effort? What other costs, if any, did companies experience directly related to the new requirements?

Comments will be publicly available on the PCAOB’s website and are due by June 10.

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