APB offers new guidance on financial instruments

New audit rules have been released on the valuation of controversial
financial instruments which played a central role in the financial crisis and
have since added fire to debates surrounding fair value accounting.

The Auditing Practices Board (APB) said it is trying to inject some clarity
into the audit of complex financial instruments which it describes as “a
challenge”, made difficult by recent stagnant economic conditions.

Richard Fleck, chairman of the APB, said the new guidelines would make it
easier to audit financial instruments when markets make valuations difficult to
come to.

“The audit of some financial instruments can be challenging, especially when
market conditions make fair values difficult to estimate,” he said

“The APB hopes that the updated (audit rules), which contains much new
guidance, will assist auditors in addressing current considerations that are
relevant in the audit of financial statements of entities that use complex
financial instruments.”

Read the full APB statement:
issues updated Interim Guidance on Auditing Complex Financial Instruments

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