Developing Independent Fair Value EstimaDeveloping Independent Fair Value Estimates for Corroborative Purposes

Developing Independent Fair Value Estimates for Corroborative Purposes

60 The auditor may make an independent estimate of fair value (for example, by using an auditor-developed model) to corroborate the entity’s fair value measurement. When developing an independent estimate using management’s assumptions, the auditor ordinarily evaluates those assumptions as discussed in paragraphs 47 to 57. Instead of using management’s assumptions the auditor may develop separate assumptions to make a comparison with management’s fair value measurements. In that situation, the auditor nevertheless understands management’s assumptions. The auditor ordinarily uses that understanding to determine that the auditor’s model considers the significant variables and to evaluate any significant difference from management’s estimate. The auditor also ordinarily performs audit procedures on the data used to develop the fair value measurements and disclosures as discussed in paragraphs 58 and 59. The auditor ordinarily considers the guidance contained in ASA 520 Analytical Procedures when performing these procedures during an audit.