AICPA Issues Updated Standard on Accounting Estimates and Disclosures for Auditors

The American Institute of CPAs (AICPA) Auditing Standards Board (ASB) has issued Statement on Auditing Standards No. 143, Auditing Accounting Estimates and Related Disclosures, to supersede SAS No. 122 section 540, Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures, and amend various other AU-C sections in AICPA Professional Standards.

“This new auditing standard provides more robust guidance for auditors who are addressing an increasingly complex financial reporting environment,” said Bob Dohrer, CPA, CGMA, AICPA Chief Auditor. “In our current period of economic uncertainty and volatility, management’s asset impairment estimates are particularly important, and this standard will aid auditors in assessing them.”

SAS No. 143 is one piece of a larger project to enhance audit quality (see the AICPA’s Enhancing Audit Quality Initiative). It enables auditors to address today’s new accounting standards and to enhance the auditor’s focus on factors driving estimation uncertainty and potential management bias.