The Auditing Standards Board of the American Institute of Certified Public Accountants recently issued Statement on Auditing Standards (SAS) No. 144 regarding the auditor’s use of specialists and the auditor’s use of pricing information obtained from external information sources. SAS No. 144:
- Provides an appendix to AU-C section 540, Auditing Accounting Estimates and Related Disclosures, that includes more specific guidance related to the use of pricing information obtained from external information sources as audit evidence for estimates related to the fair value of financial instruments
- Provides guidance to be applied when management has used the work of a specialist in making accounting estimates, including, among other guidance, stating that additional procedures may be necessary if the management’s specialist's findings or conclusions appear to contradict the relevant assertion, or the management’s specialist's work does not provide sufficient appropriate audit evidence
- No longer refers to using the work of an external inventory-taking firm as using the work of a management’s specialist, but continues to require the auditor to perform certain procedures regarding the existence and condition of inventory if inventory is material to the financial statements and management engages an external inventory-taking firm
- Enhances the guidance related to using the work of an auditor’s specialist, including, among other guidance, examples of situations in which the auditor may conclude that the work of the auditor’s specialist is not adequate for the auditor’s purposes
SAS No. 144 Amendments to AU-C Sections 501, 540, and 620 Related to the Use of Specialists and the Use of Pricing Information Obtained From External Information Sources, is effective for audits of financial statements for periods ending on or after December 15, 2023.