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

Orrin Group's auditor has engaged an auditor's expert, a valuation specialist employed by a firm with a close business relationship with Orrin's finance director, to value investment properties that are a key audit matter. Under ISA 620, which factor most directly affects whether the auditor can use this expert's work?

The key factor is the auditor's evaluation of the expert's competence, capabilities and objectivity. A close relationship with the finance director threatens objectivity, so safeguards or an alternative expert must be considered. The auditor keeps sole responsibility for the opinion, so naming the expert does not share it.

  1. AThe evaluation of the expert's competence, capabilities and objectivity, including the threat from the relationshipCorrect
  2. BThe expert's willingness to be named in the audit report so responsibility is shared
  3. CWhether the expert is a member of the same network as the auditor
  4. DWhether the valuation results are lower than management's figures

Explanation

ISA 620 requires the auditor to evaluate the expert's competence, capabilities and objectivity; a close relationship with the client's management is a threat to objectivity that must be assessed. Naming the expert does not transfer responsibility, and network membership or the direction of the result is not the criterion.

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