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SAS
No. 20 Using the Work of an Expert |
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 Status |
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Issued by Auditing Standards Committee in Taiwan on
16 November, 1990. |
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Summary |
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When using the work performed by an expert, the auditor should
obtain sufficient appropriate audit evidence that such work is
adequate for the purposes of the audit. |
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“Expert” means a person or firm possessing special skill, knowledge
and experience in a particular field other than accounting and
auditing.
An expert may be:
(a) Engaged by the entity;
(b) Engaged by the auditor;
(c) Employed by the entity; or
(d) Employed by the auditor. |
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The auditor may need to obtain audit evidence in the form of
reports, opinions, valuations and statements of an expert for
situations such as the following:
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Valuations of certain types of assets, for example, land and
buildings, plant and machinery, works of art, and precious stones.
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Determination of quantities or physical condition of assets,
for example, minerals stored in stockpiles, underground mineral and
petroleum reserves, and the remaining useful life of plant and
machinery.
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Determination of amounts using specialized techniques or
methods, for example, an actuarial valuation.
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The measurement of work completed and to be completed on
contracts in progress.
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Legal opinions concerning interpretations of agreements,
statutes and regulations. |
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When determining the need to use the work of an expert, the auditor
would consider:
(a) The engagement team’s knowledge and previous experience of the
matter being considered;
(b) The risk of material misstatement based on the nature,
complexity, and materiality of the matter being considered; and
(c) The quantity and quality of other audit evidence expected to be
obtained.
When planning to use the work of an expert, the auditor should
evaluate the professional competence of the expert. This will
involve considering the expert’s:
(a) Professional certification or licensing by, or membership in, an
appropriate professional body; and
(b) Experience and reputation in the field in which the auditor is
seeking audit evidence. |
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The auditor should evaluate the appropriateness of the expert’s work
as audit evidence regarding the assertion being considered. This
will involve evaluation of whether the substance of the expert’s
findings is properly reflected in the financial statements or
supports the assertions, and consideration of:
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Source data used;
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Assumptions and methods used and their consistency with prior
periods; and
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Results of the expert’s work in the light of the auditor’s
overall knowledge of the business and of the results of other audit
procedures. |
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When considering whether the expert has used source data which is
appropriate in the circumstances, the auditor would consider the
following procedures:
(a) Making inquiries regarding any procedures undertaken by the
expert to establish whether the source data is relevant and
reliable.
(b) Reviewing or testing the data used by the expert. |
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If the results of the expert’s work do not provide sufficient
appropriate audit evidence or if the results are not consistent with
other audit evidence, the auditor should resolve the matter. This
may involve discussions with the entity and the expert, applying
additional audit procedures, including possibly engaging another
expert, or modifying the auditor’s report. |
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When issuing an unmodified auditor’s report, the auditor should not
refer to the work of an expert. |
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If, as a result of the work of an expert, the auditor decides to
issue a modified auditor’s report, in some circumstances it may be
appropriate, in explaining the nature of the modification, to refer
to or describe the work of the expert (including the identity of the
expert and the extent of the expert’s involvement). In these
circumstances, the auditor would obtain the permission of the expert
before making such a reference. If permission is refused and the
auditor believes a reference is necessary, the auditor may need to
seek legal advice. |
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 Effective
date
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This Statement is effective for audit of financial statements with
fiscal years ending on or after 31 December, 1990. |
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