Document ID: chunk:federal_register_of_legislation:F2022C01189:reg:7:p18
Version: federal_register_of_legislation:F2022C01189
Segment Type: reg
Provision Reference: reg 7 (pt 18/21)
Character Range: 58616–61710

for this purpose.[23]

A56.         Aspects of the management's expert's field relevant to the auditor's understanding may include:

           * Whether that expert's field has areas of specialty within it that are relevant to the audit.

           * Whether any professional or other standards, and regulatory or legal requirements apply.

           * What assumptions and methods are used by the management's expert, and whether they are generally accepted within that expert's field and appropriate for financial reporting purposes.

           * The nature of internal and external data or information the management's expert uses.

A57.         In the case of a management's expert engaged by the entity, there will ordinarily be an engagement letter or other written form of agreement between the entity and that expert.  Evaluating that agreement when obtaining an understanding of the work of the management's expert may assist the auditor in determining the appropriateness of the following for the auditor's purposes:

           * The nature, scope and objectives of that expert's work;

           * The respective roles and responsibilities of management and that expert; and

           * The nature, timing and extent of communication between management and that expert, including the form of any report to be provided by that expert.

A58.         In the case of a management's expert employed by the entity, it is less likely there will be a written agreement of this kind.  Enquiry of the expert and other members of management may be the most appropriate way for the auditor to obtain the necessary understanding.

Evaluating the Appropriateness of the Management's Expert's Work (Ref: Para. 8(c))

A59.         Considerations when evaluating the appropriateness of the management's expert's work as audit evidence for the relevant assertion may include:

           * The relevance and reasonableness of that expert's findings or conclusions, their consistency with other audit evidence, and whether they have been appropriately reflected in the financial report;

           * If that expert's work involves use of significant assumptions and methods, the relevance and reasonableness of those assumptions and methods;

           * If that expert's work involves significant use of source data, the relevance, completeness, and accuracy of that source data; and

           * If that expert's work involves the use of information from an external information source, the relevance and reliability of that information.

Information Produced by the Entity and Used for the Auditor's Purposes (Ref: Para. 9(a)‑9(b))

A60.         In order for the auditor to obtain reliable audit evidence, information produced by the entity that is used for performing audit procedures needs to be sufficiently complete and accurate.  For example, the effectiveness of auditing revenue by applying standard prices to records of sales volume is affected by the accuracy of the price information and the completeness and accuracy of the sales volume data.  Similarly, if the auditor intends