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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Using the work of others

Auditor Marlow LLP engages an actuary to assess a defined benefit obligation of Brightwater plc. The actuary is a partner in a firm that also provides Brightwater's board with advisory services on pension scheme design. Under ISA 620, what is the auditor required to do when evaluating the expert?

The auditor must evaluate the expert's competence, capabilities and objectivity, including how the firm's advisory work for the client could threaten objectivity. Professional regulation alone does not remove the need for this evaluation, and naming the expert in the report is not required for an unmodified opinion.

  1. AEvaluate the expert's competence, capabilities and objectivity, including the threat from the advisory relationshipCorrect
  2. BAccept the expert as objective because actuaries are professionally regulated
  3. CEvaluate competence only, since objectivity applies solely to internal auditors
  4. DDisclose the expert's name in the auditor's report as a condition of using the work

Explanation

ISA 620 requires the auditor to evaluate whether the expert has the necessary competence, capabilities and objectivity. Interests and relationships, such as advisory work for the client, are considered as threats to objectivity. Objectivity is not limited to internal auditors, and the report does not need to name the expert for an unmodified opinion.

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