How to apply the revised ISA (UK) 540


























How to apply the revised ISA (UK) 540 | ICAEW




























































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The revised ISA (UK) 540 is now effective. From risk assessment to professional scepticism, Simon Kettlewell shares some practical tips on its application.

The first half of 2021 could be seen as a ‘perfect storm’ for auditors. The ongoing impact of the COVID-19 pandemic provided logistical, practical and technical challenges for audit firms as well as their clients. Brexit also presented its own unique set of circumstances. Added to the mix was the introduction of several revised auditing standards, which became effective for periods commencing on or after 15 December 2019. For auditors dealing with clients with 31 December 2020 year ends, the landscape looked substantially different from the one faced for the previous year’s audit.Cover image

Out of those revised auditing standards, ISA (UK) 540 (Revised) Auditing Accounting Estimates and Related Disclosures is the one that has resulted in the most significant changes to methodologies and is therefore likely to have posed the biggest challenges to audit firms.