Business, Management and Accounting
2 years ago

New standards unlikely to improve fair value audits, specialists' limited role.

Auditing A Journal of Practice & Theory
The Role of Valuation Specialists in Audits of Fair Values and Potential for Change under Amended Public Company Accounting Oversight Board Standards
Emily E. Griffith, Jacqueline S. Hammersley

Paper Summary

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The PCAOB changed standards for using valuation specialists in audits. Auditors and specialists were interviewed about their roles and issues in fair value audits. Specialists are more involved in fieldwork than planning and completion. The amended guidance won't significantly change practice because specialists won't have more responsibility or guidance, auditors won't need valuation knowledge, and uncertainty in fair value settings won't decrease.