Are you doing audits for entities where estimating fair values is a critical issue? Especially for financial instruments, and especially in these current turbulent times? If you are, then it would be very useful for you to read the latest IAASB Newswire release: New IAASB Audit Practice Alert Focuses on Fair Value Accounting Estimates.

The IAASB has recognised that there are a number of challenges for auditors in auditing fair value estimates in light of current financial market conditions, including the "credit crunch" and reduced market liquidity So it has issued a "Staff Audit Practice Alert" to assist auditors who have the very difficult task of auditing fair value estimates in these times of great uncertainty. The alert does not replace the need for auditors to reference the standards (and ensure that all the mandatory requirements of the standards are met), but it does draw auditors' attention to many of the important matters to consider. To name a few:

• understanding the entity and its environment;
• assessing risks of material misstatement;
• responding to assessed risks;
• using the work of an expert;
• obtaining management representations;
• going concern;
• considering fraud; and
• audit reporting.

Remember! For each of the ISAs mentioned in this Practice Alert, there is an equivalent ASA - and that compliance with the ASA enables compliance with the ISA!