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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Evidence and testing considerations

Calder & Co is auditing Zenith Mining, whose main asset is a set of mineral reserves. The audit team lacks geological expertise, so the engagement partner engages an external geologist as an auditor's expert under ISA 620. Which action must the auditor take before relying on the expert's work?

The auditor must evaluate the expert's competence, capabilities and objectivity before relying on the work. ISA 620 requires this because the auditor remains solely responsible for the audit opinion, so the expert's work cannot be accepted without assessing its adequacy and the expert's suitability.

  1. AEvaluate the expert's competence, capabilities and objectivityCorrect
  2. BObtain management's written approval of the expert's conclusions
  3. CRefer to the expert by name in the auditor's report to share responsibility
  4. DAccept the expert's report without further evaluation because the expert is independent of the audit team

Explanation

ISA 620 requires the auditor to evaluate the competence, capabilities and objectivity of an auditor's expert. Management approval is not required, and the auditor's report should not refer to the expert unless it is relevant to a modified opinion. Accepting the work without evaluation breaches the ISA, because the auditor retains sole responsibility for the opinion.

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