Page 59 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
3. Audit Decisions: Tasks related to decisions made by the external auditor about the internal audit function
or its use.
Step 3:- Review of the work performed by internal auditors
Sufficiency of Direction, Supervision, and Review: The external auditor's direction, supervision, and review
must be sufficient to ensure that internal auditors have obtained enough appropriate audit evidence to support
their conclusions.
Checking Back to Audit Evidence: Review procedures should involve the external auditor checking back to
the underlying audit evidence for some of the work done by internal auditors.
Recognizing Lack of Independence: The nature, timing, and extent of direction, supervision, and review
should consider the lack of independence of internal auditors.

SA 620

Using the Work of an Auditor’s Expert

(CNO-SA620.020) SCOPE OF SA 620
1. SA 620 Scope: This standard addresses the auditor's responsibilities when using work of expert other than
accounting or auditing to assist in obtaining sufficient appropriate audit evidence.
2. Exclusions: SA 620 does not apply to situations where the engagement team includes a specialist in
accounting or auditing, or when the auditor uses the work of an expert (other than in accounting or auditing)
used by the entity to assist in preparing the financial statements (a management's expert).
3A. Auditor's Expert: This refers to an individual or organization with expertise in a field other than
accounting or auditing, whose work is used by the auditor to assist in obtaining sufficient appropriate audit
evidence. This expert may be internal (a partner or staff of the auditor's firm or a network firm) or external.
3B. Management's Expert: This is an individual or organization with expertise in a field other than
accounting or auditing, whose work is used by the entity to assist in preparing the financial statements.

(CNO-SA620.040) The Auditor’s Responsibility & Objective
1. Auditor's Responsibility: The auditor holds the sole responsibility for the audit opinion, which is not
diminished by the use of an auditor's expert.
2A. Whether to Use Expert's Work: The auditor has to decide whether to use the work of an auditor's expert.
2B. Evaluation of Expert's Work: If the auditor chooses to use the expert's work, they must determine if that
work is adequate for their purposes.
3. Areas of Expertise: Expertise in fields other than accounting or auditing can be Useful for auditor This
includes:
(Shortcut: TRAVeL)
• Tax Compliance: Analysis of complex or unusual tax compliance issues.
• Reserves Estimation: Estimation of oil and gas reserves.
• Actuarial Calculations: Actuarial calculation of liabilities.
• Valuation: Valuation of complex financial instruments, land, buildings, plant, and machinery.
• Legal Interpretation: Interpretation of contracts, laws, and regulations.
Nature, Timing and Extent of Audit Procedures
(Shortcut: SNARQ)
The nature, timing and extent of the auditor’s procedures will vary depending on the circumstances. In
determining the nature, timing and extent of those procedures, the auditor shall consider matters including:
Significance: Importance of expert's work in the audit context.
Nature: Nature of matter of expert's work.
Auditor’s Familiarity: Auditor’s familiarity with the expert's previous work.

www.auditguru.in 3.15