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PCAOB Auditing Standard 2501: Auditing Accounting Estimates

Being offered twice a quarter on Fridays at 1:00 p.m. to 3:00 p.m. Central Time.

The PCAOB has adopted a new standard, Auditing Standard 2501, Auditing Accounting Estimates, Including Fair Value Measurements, and related amendments.

This new standard replaces the Board's existing standards on auditing accounting estimates, fair value measurements, and derivative instruments starting January 1, 2020.

The PCAOB objective is to strengthen and enhance requirements for auditing estimates, including fair value measurements. This rulemaking is a companion to the rulemaking on the auditor's use of the work of specialists.

Accounting estimates are becoming more prevalent and significant as financial reporting frameworks evolve and require greater use of estimates, including those based on fair value measurements. They are some of the areas of greatest risk in the audit, requiring additional audit attention and appropriate application of professional skepticism. Auditing accounting estimates have proven challenging for auditors.

This timely, two hour morning CPE training event is designed for the CPA firm staff members who will be working on PCAOB regulated audits. The attendees will learn how this Auditing Standard should be reflected in the 2021 auditing workpapers.


The retail cost of the online 2 CPE internal auditor training event is $120 per attendee.


Each attendee will receive 2 CPE Hours (YB). A certificate of completion will be provided.

Program Level of Understanding: Basic
Prerequisites: None
Advance Preparation: None
Delivery Format: Group Internet Based
NASBA Field(s) of Study: Auditing
CPE Credits: 2, based on 50 minutes of instruction per hour

CPE Event Highlights

Based on the relevant professional literature and PCAOB Auditing Standards:

  • What are the PCAOB Audit Standards?

  • What are the typical inspection report issues that lead to changing AS 2501?

  • What are the key audit planning issues within AS 2501?

  • How does the old standard differ from the new standard?

  • How should this effect audit planning?

  • How should this effect audit procedures?


Learning Objectives

Attendees will:

  • Understand the PCAOB's Audit Standard 2501.

  • Understand how this change in standard will effect risk assessment from the external audit viewpoint.

  • Have examples of audit documentation.

  • Have an approach to issues concerning PCAOB Auditing Standard 2501 compliance.


Key Items on the Agenda

Section 1 - The PCAOB's Auditing Standards

  • What is the "PCAOB" context?

  • What is the "Tradecraft"?

  • Observations from the PCAOB's 2018 Inspections of the "Big Six"

  • PCAOB Spotlight Reminders

  • Why did the PCAOB make these changes?

Section 2 - Current PCAOB Auditing Standards

  • General Auditing Standards

  • PCAOB Auditing Standards Five Major Sections

  • Audit Procedure Section

  • PCAOB Auditing Standard 2500: Audit Procedures for Certain Accounts or Disclosures

  • New PCAOB Auditing Standard 2500 Sections

  • Amendments to other PCAOB Auditing Standards

  • PCAOB Objectives

  • Audit Practice Impacts

Section 3 - PCAOB Auditing Standard 2501

  • The 18 Topic Headings

  • PCAOB Staff Guidance

  • Auditing Accounting Estimates

  • Auditing the Fair Value of Financial Instruments

  • Supervising of Using the Work of an Auditor's Specialist

  • Using the Work of a Company's Specialist

Section 4 - Auditing Accounting Estimates

  • Overview

  • Approach to Accounting Estimates

  • Identifying and Assessing Risk

  • Responding to Assessed Risks of Material Misstatement

  • Developing an Independent Expectation

  • Evaluating Subsequent Events and Transactions

Section 5 - Auditing the Fair Value of Financial Instruments

  • Overview

  • The Standard relating to Fair Value of Financial Instruments

  • Identifying and Assessing Risk of Material Misstatement

  • Determining Whether Pricing Information Provides Sufficient Appropriate Evidence

  • What is a "pricing service"?

  • Assessing Reliability of Pricing Information

  • Multiple Pricing Services

  • Fair Value measurement

Section 6 - Supervising or Using the Work of an "Auditor's Specialist"

  • Overview

  • Definitions

  • Auditor-employed Specialist

  • Auditor-engaged Specialist

  • Supervising or Using the Work of an Auditor's Specialist


Section 7 - Going Forward and Summary

  • PCAOB Inspections Effect on the Auditor Culture

  • Why did the PCAOB make these changes?

  • This is a Two-Pronged Approach

  • Key Concepts for the Audit Practice

  • PCAOB Staff Guidance