Skip to content

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

Auditor Okoro & Partners uses a valuation specialist to value investment property held by Delmar Holdings. The specialist's report uses a discount rate that the auditor finds unusually low compared with market evidence. What should the auditor do under ISA 620?

The auditor should evaluate the reasonableness of the expert's assumptions and methods and, if the discount rate appears inappropriate, resolve it by discussing with the expert or doing further procedures. Blind reliance on expertise is not allowed, and modification arises only if the matter remains unresolved.

  1. AEvaluate the appropriateness of the expert's work as audit evidence, including assumptions and methods, and resolve the matter, for example by discussing it with the expert or performing further proceduresCorrect
  2. BAccept the report because the expert is more qualified than the audit team
  3. CReject the work and issue a qualified opinion immediately
  4. DAsk management to replace the discount rate without telling the expert

Explanation

The auditor must evaluate the adequacy of the expert's work, including relevance and reasonableness of assumptions and methods. If the work is inadequate, the auditor agrees with the expert on further work or performs additional procedures, possibly engaging another expert. A modification is only considered if the matter cannot be resolved.

Did you get it right without looking?

One question tells you little. A timed set on Using the work of others shows your real accuracy, how long you take and where you lose marks.

Practise Using the work of othersFree diagnostic mock

More Using the work of others questions