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Documenting the audit of accounting estimates under ISA 540 (Revised)

Documenting the audit of accounting estimates is important because it provides evidence that the audit complies with ISAs. ISA 540 (Revised) Auditing accounting estimates and related disclosures introduces enhanced documentation requirements and this Audit and Assurance guide provides information and guidance on what needs to be documented, and when, in your audit of accounting estimates.

ISA 230 Audit documentation, sets out the auditor’s objective to prepare documentation that provides a sufficient and appropriate record of the basis for the auditor’s report and evidence that the audit was planned and performed in accordance with ISAs and applicable legal and regulatory requirements. ISA 230 includes requirements on the form, content and extent of audit documentation required.

ISA 540 (Revised) specifically requires audit documentation to include: