Page 60 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
Risk: Risk of material misstatement in the expert's related matter.
Quality Control: Whether the expert adheres to the auditor firm's quality policies and procedures.
The following factors may suggest the need for different or more extensive procedures than would
otherwise be the case:
(Shortcut: SNARQ)
Significance: The auditor’s expert is performing procedures that are integral to the audit, rather than being
consulted to provide advice on an individual matter.
Nature: The work of the auditor’s expert relates to a significant matter that involves subjective and complex
judgments.
Auditor’s Familiarity: The auditor has not previously used the work of the auditor’s expert, and has no prior
knowledge of that expert’s competence, capabilities and objectivity.
Risk: Risk of material misstatement in the expert's related matter.
Quality Control: The expert is an auditor’s external expert and is not, therefore, subject to the firm’s quality
control policies and procedures.

(CNO-SA620.060) Step 1: - Determining the Need for An Auditor’s Expert
(Shortcut: RAMPS ka Significance & Complexity)
Risk: Assess the risks of material misstatement.
Alternatives: Consider the availability of alternative audit evidence sources.
Management's Expert: Consider if management has used their own expert in preparing financial statements.
Procedures:
- Determine the expected nature of audit procedures in response to identified risks.
- Evaluate the auditor's familiarity with experts' work in relevant areas.
Significance & Complexity: Look at the nature, significance, and complexity of the matter.
When management has used a management’s expert
Shortcut: Work Management at CPEC/ Alternative Shortcut: Mgmt Experts Work Chandrayan Pc
Expert's Work: Nature, scope, and objectives of management's expert's work.
Management Influence: The degree of control or influence management has over the management's expert's
work.
Competence: The competence and capabilities of the management's expert.
Performance Standards: Whether the management's expert is subject to technical performance standards or
professional/industry requirements.
Employment Status: Whether the management's expert is an entity employee or an engaged party.
Controls: The existence of controls within the entity over the management's expert's work.

(CNO-SA620.080) Step 2: - The Competence, Capabilities and Objectivity of The Auditor’s Expert
Competence: Auditor's expert's skills and knowledge must be evaluated.
Capability: Ability to perform task, having time, team & infrastructure
Objectivity: Assess potential threats to the expert's objectivity, especially for external experts.
Standards: Ensure the expert's work meets all relevant professional, industry, and legal standards.
Other Matters That May Be Relevant Include
Shortcut: RAM
1A. Expertise Relevance: The auditor's expert's competence should be relevant to the specific matter for
which their work will be used. For instance, an actuary specializing in property and casualty insurance may not
be the best choice for pension calculations.
1B. Accounting Competence: The auditor's expert should have a strong understanding of the relevant
accounting and auditing requirements.
1C. Methodological Knowledge: The auditor's expert should be familiar with the assumptions, methods, and
models that are consistent with the applicable financial reporting framework.
www.auditguru.in 3.16