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

Kestrel Foods Ltd uses an external valuer, engaged by management, to value its investment properties. The audit senior proposes relying on the valuation report because the valuer holds a recognised professional qualification. Which approach is most consistent with ISA 500?

The auditor should evaluate the valuer's competence, capabilities and objectivity, understand the work performed, and assess whether it is appropriate audit evidence for the assertion. A qualification alone is not enough, and the auditor remains solely responsible for the opinion.

  1. ARely on the report, as professional qualification removes the need for further evaluation of competence
  2. BEvaluate the valuer's competence, capabilities and objectivity, understand the work, and evaluate the appropriateness of the work as audit evidenceCorrect
  3. CReject the report, because evidence from a management's expert can never be reliable
  4. DRefer to the valuer in the auditor's report to share responsibility for the opinion

Explanation

ISA 500 requires the auditor to evaluate the expert's competence, capabilities and objectivity, obtain an understanding of their work, and evaluate the appropriateness of that work as audit evidence for the relevant assertion. A qualification alone is not sufficient. Management's expert evidence can be used once evaluated, so rejecting it outright is wrong.

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