The Public Company Accounting Oversight Board (PCAOB) released a staff report on Tuesday, Feb. 4, warning auditing firms about the risks of relying on specialists for fair value measurements and accounting estimates.
The report highlights the increasing importance of specialists in financial reporting. The PCAOB stresses in the report that if an audit firm does not properly oversee or evaluate a specialist’s work, there is an elevated risk that the firm will not detect a material misstatement in the financial statements.
The PCAOB also provided observations to help audit firms implement appropriate procedures when using specialists, emphasizing that auditors must evaluate whether the specialist's work offers sufficient evidence to support financial statement conclusions. Learn more.