The IAASB's International Standard on Auditing (ISA) 540 (Revised) Implementation Working Group has prepared illustrative examples for auditing simple and complex accounting estimates. The examples are designed to illustrate how an auditor could address certain requirements of ISA 540 (Revised), and have been developed to assist the auditor in understanding how ISA 540 (Revised) may be applied to:
Simple Accounting Estimate – Provision on Inventory Impairment
Complex Accounting Estimate – Provision on Property, Plant and Equipment Impairment
The examples illustrate accounting estimates with varying characteristics and degrees of complexity. Each example illustrates a selection of requirements from ISA 540 (Revised). Not all requirements are addressed in each example, nor do they cover all parts of those requirements that have been selected. The requirements selected across each example vary to illustrate different aspects of ISA 540 (Revised) and to focus on those requirements that are most relevant to the example.
These examples are intended to be read together with ISA 540 (Revised). This will demonstrate how an auditor’s work effort, to comply with the requirements of ISA 540 (Revised), may be scaled down and scaled up when auditing simple and complex accounting estimates.
Click here for for more information and to view the illustrative examples.
These examples do not constitute an authoritative pronouncement of the International Auditing and Assurance Standards Board (IAASB), nor do they amend, extend or override the ISAs or other of the IAASB’s International Standards. It is not meant to be exhaustive and reading these examples is not a substitute for reading the ISAs.
Additional illustrative examples are being developed to illustrate how an auditor may address the requirements of ISA 540 (Revised) in the context of more complex accounting estimates such as those relating to expected credit losses, and will be released in due course.
The International Standard on Auditing (ISA) 540 (Revised) Implementation Working Group has prepared illustrative examples for auditing simple and complex accounting estimates. The attached examples are designed to illustrate how an auditor could address certain requirements of ISA 540 (Revised), and have been developed to assist the auditor in understanding how ISA 540 (Revised) may be applied to:
The webinar will be held on June 10, 2020 from 7am – 8.30am EDT
In this 90-minute webinar Lyn Provost, IAASB Member and Chair of the EER Task Force, will explain:
what is meant by Extended External Reporting (EER)
how EER Assurance engagements provide protection for the public interest
how the IAASB’s proposed EER Assurance Guidance seeks to serve the public interest by:
providing practical guidance on particular challenges practitioners face in performing EER assurance engagements,
promoting consistent high-quality application of ISAE 3000 (Revised) to these engagements, and
enhancing trust in assurance reports and engendering greater user confidence and trust in the reliability of EER reports.
Time will be provided during this webinar to answer questions. The webinar is open to preparers and users (including investors) of EER reports, as well as to assurance practitioners and regulators.
Webinar will cover the previously released Public Consultation on Proposed Guidance: EER Assurance.
