Skip to content

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

A statutory audit firm is considering using the work of an expert valuer for a material asset of its audit client. As to the Code of Ethics (Section 320, Professional Appointments - Using the Work of an Expert), which is a factor the chartered accountant should consider?

The chartered accountant should consider the expert's reputation, expertise and resources, and whether the expert is subject to applicable professional and ethics standards. Such information can come from prior association with the expert or from consulting others about the expert.

  1. AWhether the expert is a relative of the client's promoter, since this guarantees reliability
  2. BOnly the fee quoted by the expert
  3. CWhether the expert is subject to applicable professional and ethics standards, along with reputation, expertise and resourcesCorrect
  4. DWhether the expert has previously worked for the audit firm's competitors

Explanation

The Code lists the expert's reputation, expertise and available resources, and whether the expert is subject to applicable professional and ethics standards. This can be gained from prior association or by consulting others. Fee alone and past work for competitors are not listed factors.

Did you get it right without looking?

One question tells you little. A timed set on Professional Ethics & Liabilities of Auditors shows your real accuracy, how long you take and where you lose marks.

Practise Professional Ethics & Liabilities of AuditorsFree diagnostic mock

More Professional Ethics & Liabilities of Auditors questions