Audit Engagements: Auditing Accounting Estimates (CAS 540)RS

Audit Engagements: Auditing Accounting Estimates (CAS 540)RS
Distance Learning (DL) courses are sessions that have been recorded from live, in-person offerings and made available as on-demand videos online, along with any corresponding course materials. Note these are purely self-study products and there will be no access to instructors for questions and answers. Each title qualifies for verifiable CPD hours upon successful completion of a quiz at the end of the session. Unlimited quiz attempts are available until the passing grade of 70% or better is achieved. After this, you will no longer have access to the quiz.

NOTE: Course login details are normally sent to registrants within one week from date of registration.


Recorded: October 2021 

Because the video recordings are taken from live seminars, the information presented is up-to-date at the time of recording. While we make an effort to keep our inventory updated and seasonally remove outdated titles, changes in accounting, tax and other acts and legislations can happen at any time. It is up to the purchaser to take note of the recording date, and to determine for themselves whether the recorded video is still relevant to their needs. 

This course will provide an overview of Revised CAS 540 Auditing Accounting Estimates and Related Disclosures to help practitioners be mindful of the standard and its requirements. Revised CAS 540 has significant changes from the extant standard and it is important that auditors understand the requirements to conduct a quality audit.  Using discussion, case studies and examples, participants will be able to identify the auditor’s responsibilities related to auditing accounting estimates and related disclosures and apply the standards when designing and performing procedures for audit engagements.

This course will provide an overview of the flow of requirements of the revised standard and highlight changes from existing standards.  The material will cover the key aspects and provide an approach on meeting its requirements.  Required risk assessment procedures as well as guidance on the three possible testing approaches in performing further audit procedures on accounting estimates will be provided. Other requirements such as separating assessing inherent and control risk, performing stand-back procedures and incorporating professional skepticism and meeting documentation standards will be addressed. 

By the end of the session, participants will be able to:

  • Appreciate the requirements CAS 540 and the auditor’s responsibilities related to auditing accounting estimates and related disclosures
  • Define estimation uncertainty and explain the impact of subjectivity and complexity on identifying and assessing the risk of material misstatement related to estimates
  • Explain required risk assessment procedures
  • Assess inherent and control risk to assess the risk of material misstatement and determine required procedures when estimate assessed as a significant risk
  • Compare the three testing approaches and distinguish the circumstances where each one may be applicable
  • Plan and perform other required risk response procedures related to auditing estimates and related disclosure
  • Explain file documentation requirements


  • Introduction – Overview of CAS 540
  • Risk assessment procedures: Requirements related to understanding the entity and its system of internal control related to estimates, performing a retrospective review
  • Identifying and assessing the risk of material misstatement: Requirements related to identifying and assessing risks at the assertion level, separately assessing inherent and control risks, and performing required risk assessment procedures when risk has been assessed as significant
  • Responses to assessed risk of material misstatement: Requirements related to the three testing approaches being subsequent events, testing management’s estimate and/or developing an auditor’s point estimate or range
  • Other considerations: Requirements related to evaluating management bias, obtaining written representation from management, communicating with TCWG and documentation
  • Documentation requirements

Practitioners who perform audit engagements and want to ensure they meet the requirements of  Revised CAS 540 in an effective and efficient manner.  

CPD-2 Hours

4/1/2022 - 3/31/2023 11:59 PM