- 5 Marks
Question
In connection with Accountancy and Audit, an Expert or Specialist is a firm or person that possesses special skills in a profession other than Accountancy.
Required:
i. What is the significance of evidence from Experts to an auditor? (2 Marks)
ii. Identify THREE factors to be considered before placing reliance on the report of a Specialist. (3 Marks)
Answer
i. Significance of Evidence from Experts to an Auditor (2 Marks)
- Assurance on Complex Matters:
- Experts provide evidence in areas requiring specialized knowledge outside the auditor’s expertise (e.g., valuations, legal matters).
- Improved Audit Quality:
- Use of expert evidence enhances the reliability and credibility of the audit opinion by ensuring proper evaluation of complex and technical issues.
ii. Factors to Consider Before Placing Reliance on a Specialist’s Report (3 Marks)
- Competence and Qualifications of the Specialist:
- Assess the expertise, certification, and reputation of the specialist in the relevant field.
- Independence and Objectivity:
- Evaluate whether the specialist is free from any conflicts of interest that could impair their judgment.
- Relevance and Reliability of the Report:
- Ensure the report addresses the specific audit objectives and is based on appropriate and verifiable evidence.
- Tags: Audit evidence, Reliance Factors, Specialist Report, Use of Experts
- Level: Level 3
- Topic: Use of Experts in Audits
- Uploader: Kofi