What Was Changed

The new standard replaces three existing standards by establishing a single standard that sets forth a uniform, risk-based approach. It emphasizes that auditors need to apply professional skepticism, including addressing potential management bias, when auditing accounting estimates.

The new standard also provides more direction on addressing certain aspects unique to auditing fair values of financial instruments, including the use of pricing information from third parties such as pricing services and brokers or dealers.

Auditing Accounting Estimates (AS 2501) will be updated and retitled Auditing Accounting Estimates, Including Fair Value Measurements (AS 2501). Two other standards, Auditing Fair Value Measurements and Disclosures (AS 2502) and Auditing Derivative Instruments, Hedging Activities, and Investments in Securities (AS 2503), will be superseded.

Additional information on the new auditing standard: 



Why Did the PCAOB Adopt This Standard?

The use of complex accounting estimates and fair value measurements continues to grow in financial reporting. As a result, the use of the work of specialists continues to increase in both frequency and significance. Estimates often have a significant impact on a company's reported financial position and results of operations.

Accounting estimates are often some of the areas of greatest risk in an audit, requiring additional audit attention and appropriate application of professional skepticism.

The Board's oversight activities have revealed a recurring pattern of deficiencies in this area. Over the years, PCAOB staff has provided guidance for auditors related to auditing accounting estimates, but this area remains challenging and practices among firms vary.


What Are the Effective Dates?

The new standard and related amendments are effective for audits of fiscal years ending on or after December 15, 2020.

Resources and Tools for Implementation


Staff Guidance

The PCAOB staff provides guidance that highlights aspects of the new standard and enhancements made to integrate the Board’s risk assessment requirements when auditing accounting estimates, including fair value measurements.



Staff Presentation (May 2020)

The PCAOB staff produced a video on the implementation of Auditing Accounting Estimates, Including Fair Value Measurements. 

We welcome your feedback and questions. After you've watched the video, please compete this short survey

What Will the PCAOB Evaluate after the Effective Dates?

Assessing Initial Implementation

The PCAOB released an interim analysis report and two accompanying white papers in 2022 examining the initial impact of the new requirements for auditing accounting estimates and using the work of specialists.

To inform the analysis, the staff conducted extensive stakeholder outreach and large-sample statistical analysis. The staff’s stakeholder outreach included surveys and targeted interviews of auditors, preparers, and audit committee chairs.

Further information on the interim analysis is available in the estimates and specialists post-implementation review page. 

Evaluating Overall Impact

Because some of the effects of the new requirements may take several years to fully manifest or stabilize, the PCAOB will continue to evaluate the timeline for developing any more comprehensive post-implementation review. Potential future analyses would further evaluate the benefits and costs of the new requirements, including any unintended consequences, to understand the overall impact on the auditors, public companies, and users of financial statements.

How Do I Contact the PCAOB?


Phone: (202) 591-4395   
Form:  Contact Us