Audit client briefing: Revised CAS 540, auditing estimates

Help your clients better understand the auditing process under revised CAS 540, Auditing Accounting Estimates and Related Disclosures.

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This audit client briefing provides you with a publication that can be shared with your audit clients to help explain the requirements of revised CAS 540. It will also make management aware of matters to consider in preparing for and responding to the significant revisions in, and the auditor's requests pertaining to CAS 540.

You will receive an overview of:

  • management's responsibilities in determining when accounting estimates are needed
  • management's responsibilities regarding the main components of an estimate process
  • the impact on management because of changes to the auditor's responsibilities, including broad questions auditors are likely to ask those involved in the detailed aspects of the estimation process

Your clients will also learn about:

  • specific considerations in controlling their process for deriving accounting estimates and related disclosures
  • considerations in documenting significant aspects of their process
  • understanding simple versus complex estimates