The IVSC welcomes the announcement today that its Chairman, Sir David Tweedie, has been appointed as a member of the Standing Advisory Group of the US Public Company Accounting Oversight Board (PCAOB) for a three year term, beginning in January 2014.
One of the most frequently identified findings from PCAOB inspection reports are instances where auditors appear not to have complied with PCAOB auditing standards relating to fair value measurements of financial instruments, impairment of goodwill, indefinite-lived intangible assets, and other long-lived assets. The frequency with which these issues are encountered demonstrate how difficult it is to audit these areas.
Commenting on his appointment, Sir David said:
“Today, the balance sheets of an increasing number of companies are dominated by valuation estimates, rather than ‘solid numbers’. As a result the valuation process used by management, and the auditor’s review thereof, has had to evolve with management ultimately relying increasingly on outside valuation specialists, requiring auditors to gain a better understanding of the assumptions and methodologies employed by these specialists. I look forward to contributing to ensuring that the process by which important valuations are established and audited is one that can be trusted.”
The IVSC aims, through the development of its Standards to provide the benchmark of performance for the valuation profession and to improve the trust in and credibility of valuations. The development of this set of high quality global standards will support the work of the valuer and auditor alike.