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

A chartered accountant firm intends to rely on a valuation specialist engaged for a client's financial reporting. Under the Code of Ethics, which is a factor the accountant should consider in deciding to use the expert's work?

The accountant should consider the expert's reputation, expertise and available resources, and whether the expert is subject to applicable professional and ethics standards. This can be learned from prior association with the expert or by consulting others. Low fees or links with the client are not relevant factors.

  1. AWhether the expert charges the lowest fee
  2. BWhether the expert is subject to applicable professional and ethics standards, and the expert's reputation, expertise and resourcesCorrect
  3. CWhether the expert is a relative of the client's promoter
  4. DWhether the expert has worked only for the audit client

Explanation

The factors include the reputation and expertise of the expert, the resources available to the expert, and whether the expert is subject to applicable professional and ethics standards. This information may come from prior association or from consulting others. Fee level is not a listed factor.

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