Post-Implementation Review of ISA 540 (Revised)

In June 2018, the IAASB approved ISA 540 (Revised), Auditing Accounting Estimates as a final standard. ISA 540 (Revised) established 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. These revisions also emphasized the importance of the appropriate application of professional skepticism when auditing accounting estimates. The standard was effective for audits of financial statements for periods beginning on or after December 15, 2019.

The IAAS is undertaking a post-implementation review (PIR) of the revised standard in order to:

• Determine whether ISA 540 (Revised) has achieved it intended purpose by identifying:
  • Improvements or benefits from applying the revised standard; and
  • Practical challenges or questions regarding its application, including whether it is being consistently understood and implemented; and

• Determine what actions, if any, are needed by the IAASB to address identified matters.