The PCAOB has issued a new standard for auditing accounting estimates: AS 2501, Auditing Accounting Estimates, Including Fair Value Estimates, which creates new guidance on auditing estimates, fair value, and derivatives. The new guidance impacts the work that audit teams must perform when auditing accounting estimates. Companies should work with their auditors to understand current practices as well as the specific procedures and incremental effort the new standards will require for each audit.
Changes will be effective for audits of companies for periods ending on or after December 15, 2020 (2020 for calendar year ends).
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