Supporting International Standards

Auditing Accounting Estimates

April 5, 2022


For entities of all types and sizes, management has to make accounting estimates, which have estimation uncertainty and may also be complex. Making these estimates involves selecting and applying a method using assumptions and data, which requires judgment. The nature, timing and extent of the audit procedures will vary in relation to the estimation uncertainty and the assessment of the related risks of material misstatement.  

This implementation tool contains “what”, “why” and “how” suggestions. These are not all-encompassing and more or different considerations may apply depending on the circumstances of the engagement. 

The implementation tool also works in conjunction with the IAASB’s previously published ISA 540 (Revised) flowcharts showing the requirements flow. The choice of specific procedures an auditor decides to perform to meet the requirements of ISA 540 (Revised) and other relevant ISAs is a matter of professional judgement. This implementation tool does not replace the need to read ISA 540 (Revised), including its application and other explanatory material. 

IAASB's ISA 540 (Revised) Flow Charts

This implementation tool does not replace the need to read ISA 540 (Revised), including the application and other explanatory material. It is also intended to be used in conjunction with other non-authoritative material and resources.

ISA 540 (Revised) Resources

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