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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Quality management (firm and engagement level)

During an audit of Zenith Foods, the engagement partner finds the team lacks expertise in valuing complex biological assets. The firm has no valuation specialist. Under ISQM 1 and ISA 220 (Revised), which response is most appropriate?

The engagement partner should take the issue to the firm so that an appropriate specialist is assigned or obtained, and consider withdrawal if suitable resources cannot be provided. Competence must be secured before the audit proceeds, rather than disclosed as a limitation or delegated to management's expert.

  1. AContinue with the existing team and document the lack of expertise as a limitation in the auditor's report
  2. BAsk management's valuer to carry out the audit procedures on the biological assets
  3. CReduce the sample size on biological assets because the team cannot evaluate the data
  4. DRequest that the firm assign or obtain an appropriate specialist, or consider withdrawing if suitable resources cannot be providedCorrect

Explanation

ISA 220 (Revised) requires the engagement partner to determine that appropriate resources are assigned or made available in a timely manner. If they are inadequate, the partner must raise it with the firm. Using management's valuer compromises objectivity, reducing samples is inappropriate, and a limitation is not a substitute for competence.

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