7073.7 Step 7: Evaluate Work of Specialists and Experts

Sep-2020

OAG Guidance

For guidance on planning considerations related to using specialists and experts when auditing estimates, refer to OAG Audit 7073.2.

If we have used the work of a specialist or auditor’s expert to obtain audit evidence in relation to an accounting estimate, for example in support of certain significant assumptions, we obtain and review the agreed deliverables provided by the specialist or expert. Matters to address in performing this review include the following:

• The deliverables are to be reviewed by an engagement team member with an appropriate level of experience to gain an understanding of the nature, timing and extent of procedures performed, evidence obtained, significant judgments made, and the conclusions reached.
• Our review of the deliverables includes determining that:
  • The form and extent of the documentation and the nature and extent of the conclusions reached are consistent with what was agreed during the planning phase and meet the appropriate documentation requirements.
  • The work performed addressed all areas (e.g., the agreed significant assumptions) that were assigned to the specialist/expert.
• We evaluate and take appropriate action on any items identified in the specialist/expert report (or communicated to us by other means) that require follow up and further consideration. For example, if the specialist/expert disagrees with the appropriateness of a particular assumption and recommends further investigation or changes, we understand the nature of the objections and determine the appropriate path to resolution. If we do not have the expertise to appropriately assess the item, we work with the specialist/expert to resolve the issue.
• We review the scoping and/or completion memoranda (or alternative forms of documenting the agreed scope, objectives and division of responsibilities between the specialist’s/expert’s work and other engagement team members) to determine that all agreed work has been completed by either the specialist/expert or other engagement team members and all work was reviewed by appropriate individuals.
• Determine that final versions of the agreed deliverables (e.g., memoranda and any supporting schedules prepared by specialists) are included within the audit workpapers.

Refer to OAG Audit 7073.2 for guidance regarding the use of work of specialists/experts when auditing estimates. For general guidance on the use of specialists or experts, refer to OAG Audit 3090 and OAG Audit 3100.

Refer to the Internal Experts - Scoping and Completion Memo template that may assist with the coordination of audit efforts when we use the work of internal experts. Similar considerations may be relevant to situations when we use specialists.

OAG Guidance

Use of management’s experts

Refer to the section Use of Work of Management’s Expert in OAG Audit 7073.2 for guidance regarding the use of work of management’s experts when auditing estimates. For general guidance on using management’s experts, refer to OAG Audit 3110.

As noted in CAS 540.A131, when the work of a management’s expert involves the use of methods, data or developing a point estimate, requirements of CAS 540.21-29 and related guidance in OAG Audit 7073.3 to OAG Audit 7073.6 may assist us in evaluating the appropriateness of the expert’s work.

Use of service organizations

When the entity uses service organizations in making accounting estimates, refer to guidance in OAG Audit 6040.