The PCAOB is seeking input on potential changes to standards for auditors’ use of the work of specialists.
Use of specialists has become more common in recent years because of the increasing complexity of business transactions reported in financial statements, according to a PCAOB staff consultation paper issued Thursday.
Valuation specialists, appraisers, engineers, and actuaries are among the specialists whose expertise auditors of public companies increasingly use.
Staff Consultation Paper No. 2015-01, The Auditor’s Use of the Work of Specialists, seeks public comment on possible changes, specifically the objectivity and oversight of specialists and the use of their work in audits.
The paper asks whether PCAOB standards adequately address auditors’ use of the work of specialists and whether more rigorous standards and specific procedures are necessary to help auditors respond to risks of material misstatement in the financial statements.
“The use of the work of specialists is important to investors because it can help an auditor detect material misstatements in complex areas of a company’s financial statements,” PCAOB Chairman James Doty said in a news release. “We want our standards to keep pace with realities in the marketplace.”
Comments can be submitted at the PCAOB’s website. The deadline is July 31.
—Ken Tysiac ( firstname.lastname@example.org ) is a JofA editorial director.