Fair value for financial reporting falls under the regulatory oversight of the Public Company Accounting Oversight Board (PCAOB), which will be forming a new advisory group for its standard-setting activities. The new Standards Advisory Group (SAG) will consist of 18 members from various stakeholder groups: Investors will hold the most SAG seats (five), followed by audit professionals (four), and three seats each for audit committee members or directors, financial reporting oversight personnel, academics, and others with specialized knowledge. SAG members will serve two-year terms. The PCAOB will soon release details on the nomination process for SAG members. “We are now taking the PCAOB’s engagement to a higher level by creating a new, more effective structure for the board to receive advice from our stakeholders on key PCAOB initiatives,” PCAOB Chairman William Duhnke said in a news release.
The PCAOB issues fair value audit standards and guidance on the auditor’s use of a specialist, which includes valuation experts. It also issues a regular report on audit deficiencies that points out problems with fair value issues found during audit inspections.
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