Advanced Auditing, Assurance and Professional Ethics · Professional Ethics & Liabilities of Auditors

Professional Appointments (Section 320) and Using an Expert (SA 620)

Updated 5 October 2026 · Fact-checked

Section 320 of the ICAI Code of Ethics deals with professional appointments. Before accepting work, you must check that the fundamental principles can be met and communicate with the existing or previous accountant. Reliance on an expert is governed separately by SA 620, which requires you to assess the expert's competence, capabilities and objectivity. Answer by stating the provision, the facts and your conclusion.

Understand Professional Appointments and Using the Work of an Expert

Before you accept any professional work, you must be sure that you can comply with the fundamental principles: integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. Section 320 asks one question: does accepting this work create a threat to those principles, and can safeguards reduce it to an acceptable level?

The threats to the principles are self-interest, self-review, advocacy, familiarity and intimidation. Map each fact in the case to the right one:

Fees too low to allow a proper job: this threatens professional competence and due care. It is a self-interest threat, because the wish to win or keep the work may push quality down.
Lack of competence or resources for the work: this also threatens professional competence and due care.
A client with doubtful integrity: this is not a separate threat category. It puts compliance with the fundamental principles, especially integrity and professional behaviour, at risk.

Where safeguards cannot reduce the threat to an acceptable level, you must decline the appointment.

The second part is communication with the existing accountant. When you are asked to replace an accountant or to provide a second opinion, you must find out whether there are professional reasons you should not accept. You do this by communicating with the existing or previous accountant. You need the client's permission to do so. For a non-statutory engagement, if the client refuses, you should ordinarily decline the work unless you can satisfy yourself by other means.

For a statutory audit where you replace another auditor, the position is stricter. Item 8 of Part I of the First Schedule to the Chartered Accountants Act, 1949 makes it professional misconduct for a chartered accountant in practice to accept the position of auditor previously held by another chartered accountant without first communicating with him in writing. This communication is mandatory. The "satisfy yourself by other means" route is not available for a statutory audit. If the client will not allow the communication, you must decline the appointment. Sections 139 and 140 of the Companies Act, 2013 set out the procedure for appointment, removal and replacement of the auditor, including the auditor's right to be heard on removal.

Using the work of an expert is a separate matter under SA 620 (Using the Work of an Auditor's Expert), not Section 320. An expert is a person with skill in a field other than accounting or auditing, for example a valuer, actuary or engineer. Under SA 620, before you rely on that work, you must evaluate the expert's competence, capabilities and objectivity. You then evaluate whether the expert's work is adequate for your purpose. The more significant the work is to your conclusion, the more evaluation it needs.

The responsibility for the opinion stays with you. Using an expert does not reduce it. Your exam answer should always link the facts to the threat, the safeguard and a decision.

Key rules to remember

Core test for accepting work (Section 320): Accept only if threats to the fundamental principles are eliminated or reduced to an acceptable level; If safeguards cannot do this, decline the engagement.
Communication with existing accountant (Section 320): Client permission → write to the existing/previous accountant → consider the reply → decide; For a non-statutory engagement, if the client refuses permission, ordinarily decline unless satisfied by other means. For a statutory audit replacing another auditor, written communication is mandatory under Item 8 of Part I of the First Schedule to the CA Act. The 'other means' route does not apply, so decline if the client will not allow it.
Expert evaluation (SA 620): Competence + Capabilities + Objectivity → adequacy of the expert's work for your purpose; All three must be assessed before you rely on the work. This comes from SA 620, not Section 320.
Responsibility rule: Responsibility for the opinion = auditor alone; Reliance on an expert does not reduce your responsibility.
Answer format: Provision → Facts → Conclusion; Name the threat, the safeguard and your decision in every case.

How to solve Professional Appointments and Using the Work of an Expert questions

Use this method for any case on accepting an appointment or relying on an expert.

1Identify the situation: new appointment, replacement of an auditor, second opinion, or reliance on an expert.
2State the rule in one line: for an appointment, the fundamental principles must be capable of being met and any threat must be at an acceptable level (Section 320). For an expert, cite SA 620.
3Pick out the facts that create a threat: client integrity, competence, resources, fees, relationships or a refusal of permission.
4Name the type of threat and the safeguard, such as seeking clearance from the previous accountant, engaging an expert or declining.
5For an expert, assess competence, capabilities and objectivity under SA 620, then evaluate whether the work is adequate for the purpose.
6Check the procedural step: client permission and written communication with the previous accountant.
7Conclude clearly: accept, accept with safeguards, or decline. State that the auditor stays responsible for the opinion.

Quickest way: Four-line case answer

When to use it: Use it for 4 to 6 mark case questions when time is short.

Line 1: state the rule in one sentence, from Section 320 for appointments or SA 620 for experts.
Line 2: link the key fact to the threat.
Line 3: give the safeguard or required step (communication, expert evaluation).
Line 4: conclusion, either accept or decline, with a note that responsibility is retained.

Common mistakes in Professional Appointments and Using the Work of an Expert

Writing to the previous auditor without the client's permission
Students think a professional courtesy is enough.
Fix: Always say you need the client's permission first. If it is refused, ordinarily decline. For a statutory audit, do not suggest 'other means' as a substitute for written communication.
Saying that using an expert shifts responsibility to the expert
It seems logical that the expert is liable for their own work.
Fix: State that the auditor's responsibility for the opinion is not reduced.
Listing only competence when evaluating an expert
Competence is the most obvious criterion.
Fix: Mention all three: competence, capabilities and objectivity. Then add an evaluation of the work.
Quoting Section 320 for reliance on an expert
Both topics appear in the same chapter and are studied together.
Fix: Cite Section 320 for appointments and communication with the existing accountant. Cite SA 620 for using an auditor's expert.
Accepting automatically once a safeguard is listed
Students stop at naming the safeguard.
Fix: Check whether the safeguard actually brings the threat to an acceptable level. If not, decline.
Ignoring statutory requirements for replacement of a company auditor
The Code of Ethics is treated separately from the Companies Act and the CA Act.
Fix: Add one line citing Item 8 of Part I of the First Schedule to the CA Act (mandatory written communication with the previous auditor) and Sections 139 and 140 of the Companies Act, 2013.

Worked examples

Example 1

CA Meera is asked by Alpha Ltd to replace the current statutory auditor, CA Rohan, for the next year. The Managing Director says Meera should not contact Rohan because the relationship has ended badly. Advise Meera.

Show the solution

Rule: before accepting, Meera must find out whether there are professional reasons not to accept. She does this by communicating with the existing auditor, with the client's permission. For a statutory audit, Item 8 of Part I of the First Schedule to the CA Act makes written communication with the previous auditor mandatory. Accepting without it is professional misconduct.
Facts: the client is stopping her from contacting Rohan.
Application: refusing permission is itself a warning sign about the client's integrity. Without communication, Meera cannot check why the change is being made. Because this is a statutory audit, she cannot fall back on satisfying herself by other means.
Safeguard: she should ask the client to permit the communication and then write to Rohan. She should also check that the appointment and replacement procedure under Sections 139 and 140 of the Companies Act, 2013 is followed.
Conclusion: if permission is still refused, she cannot accept the appointment and must decline.

Answer: Meera must communicate with CA Rohan in writing before accepting, so she should ask Alpha Ltd to permit it. If the client still refuses, she must decline the appointment. She cannot rely on other means.

Exam tips

Write the rule first, then the facts, then the conclusion. Examiners reward this order.
Always mention client permission when the question involves communicating with the previous auditor.
For expert questions, cite SA 620 and use the triad competence, capabilities and objectivity. Add that responsibility is not reduced.
Check the facts for clues: low fees, doubtful integrity, refusal of permission, related-party experts.
Study Section 320 together with the fundamental principles and professional misconduct, since cases often combine them.

Practice questions from Professional Ethics & Liabilities of Auditors

Professional Appointments and Using the Work of an Expert in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Professional Appointments and Using the Work of an Expert: frequently asked questions

What does Section 320 of the ICAI Code of Ethics deal with?

It deals with professional appointments. It covers the steps before accepting a client or engagement, including checking compliance with the fundamental principles and communicating with the existing or previous accountant.

Do I need the client's permission to contact the previous auditor?

Yes. You should ask for it. For a non-statutory engagement, if the client refuses, you should ordinarily decline unless you can satisfy yourself by other means. For a statutory audit, written communication with the previous auditor is mandatory under Item 8 of Part I of the First Schedule to the CA Act, so you must decline if the client will not allow it.

What must an auditor check before relying on an expert?

Under SA 620, you must evaluate the expert's competence, capabilities and objectivity. You must then evaluate whether the expert's work is adequate for your purpose.

Does using an expert reduce the auditor's responsibility?

No. The auditor remains responsible for the audit opinion even when an expert's work is used.