PCAOB report analyzes impact of estimates and specialists requirements

December 10, 2022

The PCAOB released a report Thursday addressing the impact of 2018 standards related to auditing accounting estimates and the auditor's use of the work of specialists.

The interim analysis report looked at the impact of AS 2501, a standard adopted in 2018, and three standards updated in 2018 (AS 1210, AS 1105, and AS 1201):

About one-third of audit firms reported that the new requirements improved auditing practices, while others reported that the effects were limited and did not significantly change audit hours or audit fees.
Firms had significant variation in the amount of time they spent to support implementation of the new requirements and in training firm personnel for these new requirements.
There is no evidence of unintended consequences from auditors' initial implementation of the new requirements.
In addition to the report, the PCAOB released two related staff white papers: Stakeholder Outreach on the Initial Implementation of Estimates and Specialists Audit Requirements and Econometric Analysis on the Initial Implementation of the New Specialists Requirements.

The PCAOB plans to continue to monitor the implementation of the requirements and their impact on the quality of audit services, as well as on audit committees, preparers, and audit firms.

[Journal of Accountancy]