Page 137 - AAA Integrated Workbook STUDENT S18-J19

Evidence

Relying on the work of an auditor’s expert

ISA 620 Using the Work of an Auditor's Expert states that the auditor should obtain
sufficient and appropriate evidence that the work of the expert is adequate for the
purpose of the audit.

Deciding which expert to use

 Assess the expert’s competence, capability and objectivity.

 Competence and capability can be achieved by enquiring of the expert's
qualifications, experience, membership of a professional body, published work.

 Objectivity can be assessed enquiring whether there are any business or
personal relationships between the expert and the client.

Agreeing the work to be performed

The auditor should obtain an understanding of the field of expertise of the expert to
enable the external auditor to determine the scope and objectives of the work.

Before any work is performed by the expert the auditor should agree in an
engagement letter with the expert:

 The nature, scope and objectives of the expert’s work.

 The roles and responsibilities of the auditor and the expert.

 The nature, timing and extent of communication between the two parties.

 The need for the expert to observe confidentiality.

Assessing the expert’s work

Once the work has been completed the auditor must then assess it to ensure it is
appropriate for the purposes of the audit. This involves consideration of:

 The consistency of the findings with other evidence.

 The relevance and reasonableness of the assumptions and methods used by
the expert.

 The relevance, completeness and accuracy of the source data used.

If the work is not deemed adequate, further work must be agreed with the expert.

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