Accounting Estimates - ISA 540


The project objectives are to:

(i) Propose revisions to ISA 540, establishing more robust requirements and appropriately detailed guidance to foster audit quality by driving auditors to perform appropriate procedures in relation to accounting estimates and related disclosures. It is anticipated that these revisions would also seek to emphasize the importance of the appropriate application of professional skepticism when auditing accounting estimates.

(ii) Determine whether non-authoritative guidance and support tools, such as International Auditing Practice Notes,  Staff publications,  project updates or other materials, should be developed in the future to address special audit considerations relevant to financial institutions  to supplement the revisions to ISA 540 and oversee the development of the guidance material considered necessary.


Jasper van den HoutBrett James

Task Force

Rich Sharko, Chair
Marek Grabowski, Co-Chair
Ron Salole
Abhijit Bandyopadhyay, Correspondent member
Jean-Jacques Dussutour, Observer
Claire Greene, Observer

Project Stages



ISA 540 (Revised) deals with a critically important area of the financial statements – accounting estimates and related disclosures. Accounting estimates are a continually evolving area of accounting, and therefore a key focus area for the IAASB’s efforts to improve audit quality.

In June 2018 the IAASB approved ISA 540 (Revised), Auditing Accounting Estimates and Related Disclosures, as a final standard. The revised ISA will be effective for audits of financial reporting periods beginning on or after December 15, 2019. Early adoption is permitted and encouraged. In September 2018 the Public Interest Oversight Board’s (PIOB) confirmed that due process was followed. 

An implementation support working group is formed which will support awareness, understanding and effective implementation of ISA 540 (Revised). The Board will monitor implementation challenges as they arise and also committed to a post-implementation review.


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