The International Auditing and Assurance Standards Board has added its two cents to the fair value debate, publishing an audit alert that it says will help auditors apply international auditing standards in the current chaotic market environment.

IAASB said it was responding to calls from the Financial Stability Forum for guidance that would help calm the panic in applying fair value measurements in seized financial markets. The alert directs auditors to follow the recently revised ISA 540 Auditing Accounting Estimates, Including Fair Value Estimates, and Related Disclosures. Even though it’s not effective until 2009, it may be helpful to auditors planning their 2008 audit engagements, IAASB said.

James Gunn, deputy director of the IAASB, said the guide is similar in intent and content to an audit alert published by the Public Company Accounting Oversight Board in the United States last December. The alert “focuses on the responsibility of the auditor regarding obtaining audit evidence about the reasonableness of auditing estimates,” Gunn said.

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