Using the Work of an Auditor's Expert

Why rely on the work of other people?

In certain circumstances auditors may need to rely on the work of, or consult parties not involved in the audit process.  Auditors may also choose to rely on the work of others because they find it effective and efficient to do so.

Auditors do not need to be experts in all aspects of their clients' businesses. Where they lack the technical knowledge and skills to gather evidence about transactions, balances and disclosures they should seek the assistance of an expert. For example:

• property valuation;
• construction work in progress.
• assessment of oil reserves;
• specialist inventory - livestock, food and drink in the restaurant trade, jewelery; oil reserves; and
• actuarial valuations for pension schemes.

Procedures involved in using and 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.

In making this assessment the external auditor must assess the expert's:

• independence and objectivity; and
• competence (i.e. qualifications, memberships of professional bodies and experience)

Before any work is performed by the expert the auditor should agree in writing:

• 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; and
• The need for the expert to observe confidentiality.

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 significant assumptions made; and
• the use and accuracy of source data.

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