U.S. Audit Regulator Revamps Rules for Estimates, Specialists (1)

Financial statements are built around accounting estimates, and U.S. auditors will soon have new rules to help them better evaluate the accuracy of numbers that are crucial to investors.

The Public Company Accounting Oversight Board approved two standards governing the auditing of accounting estimates and the use of specialists Dec. 20.

The board revised the rules to address the growing use of estimates and the specialists who produce those numbers by public companies. Complex and subjective estimates are the most difficult areas to audit and are a common source of violations in PCAOB inspections.

The new rules are risk-based and ...