Page 62 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
2A. Liaison: Identification of specific partners or staff who will liaise with the auditor’s expert can assist in
timely and effective communication.
2B. Procedures: Procedures for communication between the expert and the entity, particularly on larger
engagements, should be established to ensure effective communication.
2C. Written Reports: In cases where the expert's work relates to significant risk conclusions of the auditor,
both a formal written report at the conclusion of the expert's work and oral reports as the work progresses may
be appropriate.
3. Confidentiality: The auditor's expert is required to observe confidentiality requirements.
3A. Regulations: Additional confidentiality requirements may be imposed by law or regulation.
3B. Ethics: The confidentiality provisions of relevant ethical requirements that apply to the auditor should also
apply to the auditor’s expert.
3C. Entity Request: The entity may request specific confidentiality provisions to be agreed with the auditor’s
external experts.
4. Roles: The respective roles and responsibilities of the auditor and the expert should be clearly defined and
agreed upon.

(CNO-SA620.140) Step 5: - Evaluating the Adequacy of The Auditor’s Expert’s Work
The auditor shall evaluate the adequacy of the auditor’s expert’s work for the auditor’s purposes, including:
The relevance and reasonableness of that expert’s findings or conclusions, and their consistency with
other audit evidence;
(Shortcut: MAD)
Methods of obtaining audit evidence
1A. Inquiries: Inquire with the auditor's expert to gain a deeper understanding of their findings and
conclusions.
1B. Inspection: Examine the expert's working papers and reports to assess the thoroughness and accuracy of
their work.
1C. Corroboration: Validate the expert's findings through various methods, including:
• Observation: Witness the expert's methods and processes firsthand.
• Recalculation: Redo calculations made by the expert to verify their accuracy.
• Analytical Procedures: Analyse statistical reports from reputable sources to corroborate the expert's
findings. Conduct in-depth analyses to assess the materiality aspects considered by the expert.
• External Confirmation: Seek validation from external sources.
2. Another expert: Engage with another expert when the findings or conclusions of the auditor's expert are
inconsistent with other audit evidence.
3. Discussion: Share and discuss the expert's report with the management team to ensure a comprehensive
understanding of the findings and conclusions.

If that expert’s work involves use of significant assumptions and methods, the relevance and
reasonableness of those assumptions and methods in the circumstances; and
1.Assumptions and Methods: The expert's work often involves significant assumptions and methods which
need to be evaluated for relevance and reasonableness.
1. Factors for Evaluation: For the auditor's evaluation of an expert’s assumptions and methods, consider if
they are:
Accepted Standards: Generally accepted within the expert’s field.
Framework Consistency: In line with the financial reporting framework.
Specialised Models: Dependent on their use.
Management Consistency: Align with management's methods or understanding the differences and their
implications.
2. SA 540: SA 540 addresses the techniques and assumptions management uses for accounting estimates,
sometimes involving Using specialised, entity-developed models., entity-specific models. While focused on

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