pexels photo

Audit procedures for assessing the work of expert.

The term expert in audit is used in the sense of individual or an organization that possess skills, knowledge and experience in the field other than accounting or auditing. The guidelines for using the work of expert by the auditor is covered in ISA 620 using the work of auditor’s expert.

ISA 620 gives number of examples where expert may be used by an auditor this include

  1. legal opinion
  2. specialist valuation areas, such as property and pension liabilities
  3. the analysis of complex or unusual tax compliance issues

The following procedures should be applied when using the work of auditors expert

  • The competence, capabilities and objectivity of expert should be assessed
  • Auditor should obtain an understanding of expert field of expertise, sufficient to allow the auditor to determine the nature, scope and objective of the expert’s work and evaluate the adequacy of that work
  • Auditor should agree terms of engagement with expert, including
  1. the nature, scope and objective of expert’s work
  2. the respective responsibilities of expert and the auditor
  3. the form of the expert report
  4. confidentiality agreement
  • Auditor should evaluate the adequacy of the expert’s work, including the ;
  1. the reasonableness of expert’s conclusion
  2. consistency of those conclusion with other audit evidences
  3. relevance, completeness and accuracy of data used in expert’s work
  4. reasonableness of significant assumptions and methods used in expert’s work

 The aims of  procedures outlined above is to assess whether the expert’s work constitute sufficient and appropriate audit evidence. If the auditor decides that the auditors work is not adequate he is required to

  • agree additional work with the expert, or
  • perform other appropriate additional audit procedures

Auditor should not refer in his report to the use of expert’s work since the auditor has a sole responsibility for the audit report issued.

The competence, capabilities and objectivity of an expert may be assessed in one or more of the following ways

  • Personal experience with previous work of  expert
  • Discussion with expert
  • Discussion with other auditors or others who are familiar with that expert work
  • Knowledge of expert’s qualifications, membership of professional body or industry association, license to practice or other other form of external recognition
  • Published papers or books written by expert

5 thoughts on “Audit procedures for assessing the work of expert.”

  1. Pingback: When is auditor supposed to examine the entire population instead of just taking a sample? – ACCOUNTING CLASS

Leave a Comment

Your email address will not be published. Required fields are marked *

%d bloggers like this: