Skip to content

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

Kestrel & Co is auditing Lumina Ltd, which holds a portfolio of unquoted mineral reserves. The audit team lacks valuation expertise and plans to engage a geologist to estimate reserve quantities. Under ISA 620, what must the auditor do FIRST in deciding whether an auditor's expert is needed?

The auditor must first determine whether expertise outside accounting or auditing is needed to obtain sufficient appropriate audit evidence. Only after reaching that conclusion does the auditor evaluate the expert's competence, agree terms and evaluate the work. Engagement fees and opinions are not the starting point.

  1. ADetermine whether expertise in a field other than accounting or auditing is necessary to obtain sufficient appropriate audit evidenceCorrect
  2. BObtain the expert's signed engagement letter with Lumina Ltd's management
  3. CAsk the expert to issue a separate opinion on the financial statements
  4. DAgree the expert's fee with the audit committee

Explanation

ISA 620 requires the auditor to determine whether expertise in a field other than accounting or auditing is needed to obtain sufficient appropriate evidence. Only then does the auditor consider evaluating the expert's competence and agreeing terms. The expert does not give an opinion on the financial statements, and the engagement is by the auditor, not management.

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