PCAOB Issues New Guidance on Fair Value

The Public Company Accounting Oversight Board has issued four documents that provide guidance on the new requirements for auditing accounting estimates and the auditor’s use of a specialist, which includes valuation experts. The four documents are:

• “Auditing Accounting Estimates”;

• “Auditing the Fair Value of Financial Instruments”;

• “Supervising or Using the Work of an Auditor’s Specialist”; and

• “Using the Work of a Company’s Specialist.”

The new requirements are effective for audits of financial statements for fiscal years ending on or after Dec. 15, 2020. For more information, the PCAOB has created two implementation pages on its website for the new estimates standard and amendments for the auditor’s use of the work of specialists.