Using the Work of an Auditor's Expert

USING THE WORK OF AN AUDITOR’S EXPERT In some instances, the auditor may need to obtain, in conjunction with the entity or independently, audit evidence in the form of reports, opinions, valuations and statements of an expert (specialist). The auditor’s education and experience enable the auditor to be knowledgeable about accounting and auditing matters, however, an auditor is not expected to have the expertise of a person trained for or qualified to engage in the practice of another profession or occupation. PSA 620 define an auditor’s expert as an individual or organization possessing expertise in a field other than accounting and auditing, whose work in that field is used by the auditor to assist the auditing in obtaining sufficient appropriate evidence. An auditor’s expert may be either an auditor’s internal expert (who is a partner or staff, including temporary staff, of the auditor’s firm or a network firm), or an auditor’s external expert. This would include individuals such as appraisers, geologists, actuaries, engineers and lawyers. Such individual may assist the auditor with valuation issues, determination of quantities or physical condition of assets, determination of amounts using specialized techniques or methods, measurement of work completed and to be completed on contracts in progress or legal opinions concerning interpretations of agreements or regulations.

Determining the Need to Use the Work of an Auditor’s Expert The auditor ordinarily considers the following when determining the need to use the work of an expert: 1. the materiality of the financial item being considered; 2. the risk of misstatement based on the nature and complexity of the matter being considered; and 3. the quantity and quality of other audit evidence available.

The Competence, Capabilities and Objectivity of the Auditor’s Expert When planning to use the work of an auditor’s expert, the auditor is expected to become satisfied as to the