Complex accounting estimates, including fair values, impairments, and valuation allowances, are increasingly important to financial statements. However, auditors experience significant difficulty in auditing complex estimates, suggesting that audit quality may be low in thisarea. Some of these difficulties can be attributed to high levels of uncertainty about valuations given volatile financial markets and innovative securities . However, others arise fromproblems with auditor judgment and the audit process. Analysis of PCAOBinspection reports for the largest accounting firms reveals that fair value measurements, including impairments and other estimates, are among the most frequently cited accounts for auditor errors and that, while otheraudit deficiencies have decreased over time, deficiencies involving fair values and impairments have not .