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

Taliesin & Co audits Norvik Ltd and used an auditor's expert on the valuation of complex derivatives. The expert's work was satisfactory and the auditor issues an unmodified opinion. The audit partner proposes to write in the auditor's report: 'Our opinion is based partly on the work of an independent valuation expert, who is therefore partly responsible for it.' Under ISA 620 and ISA 700, what is the correct view?

The wording is inappropriate. The auditor alone is responsible for the opinion, and an unmodified report should not refer to an auditor's expert because that implies shared responsibility. Reference is allowed only where law requires it or where it helps explain a modified opinion, and then must state responsibility is not reduced.

  1. AThe reference is inappropriate: the auditor has sole responsibility for the opinion, and reference to the expert would imply a division of responsibility in an unmodified reportCorrect
  2. BThe reference is required whenever an expert is used
  3. CThe reference is acceptable if the expert consents in writing
  4. DThe reference is required only for listed entities

Explanation

ISA 620 states that the auditor's responsibility for the opinion is not reduced by using an expert, so an unmodified report must not refer to the expert. Reference is permitted only if required by law or regulation, or where relevant to understanding a modification to the opinion, and then the report must state that the reference does not reduce responsibility. Consent or listed status does not change this.

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