backOn February 4, 2025, the PCAOB released a Spotlight report to highlight important considerations for PCAOB-registered public accounting firms that use the work of a specialist on audits of a public company or broker-dealer. The Spotlight provides recommendations on appropriate audit procedures to evaluate the work of a specialist engaged or employed by a company—including assessing the reliability of the methodology used by the specialist, as well as the source data and assumptions made by the specialist.
The Spotlight also provides recommendations for audit firms engaging or employing specialists to assist in an audit engagement, which include: (i) involving the specialist from the outset of the audit; (ii) involving the specialist in the risk assessment process, where appropriate; and (iii) supervising the specialist, including reviewing the specialist’s report or equivalent documentation to evaluate whether the specialist’s work provides sufficient appropriate evidence in accordance with PCAOB standards. Finally, the Spotlight also includes information concerning common deficiencies related to the use of specialists including, among other things, insufficient risk assessment, insufficient audit procedures related to evaluation of the specialist’s report and financial data provided by the specialist, and failure to use a specialist where the auditor lacks the appropriate knowledge, skill, and ability to perform related appropriate procedures.
A copy of the report is attached here.