CA Final · Advanced Auditing, Assurance and Professional Ethics · Audit Planning, Strategy and Execution

CA Vikram, engagement partner for Zenith Realty Ltd, finds during planning that the valuation of investment property uses complex assumptions beyond the team's skills. No team member has relevant valuation experience, and the audit deadline is tight. Which action is consistent with SA 540 and the planning requirements?

CA Vikram should consider involving people with specialised valuation skills and be satisfied that the engagement team and any auditor's experts together have the capabilities, competence and time. SA 540 treats this as part of planning resources, so neither accepting management's work nor disclaiming immediately is appropriate.

1. AAccept the management expert's valuation report without further procedures because the team lacks expertise to challenge it
2. BConsider involving individuals with specialised skills or knowledge and be satisfied that the team and any auditor's external experts collectively have appropriate capabilities, competence and timeCorrect
3. CDisclaim the opinion immediately because the team lacks valuation skills
4. DDelegate the evaluation of the estimate to the company's finance head, who has the necessary skills