Document ID: chunk:federal_register_of_legislation:F2022C01191:reg:8:p10
Version: federal_register_of_legislation:F2022C01191
Segment Type: reg
Provision Reference: reg 8 (pt 10/17)
Character Range: 32853–35950

framework.

           * Whether unexpected events, changes in conditions, or the audit evidence obtained from the results of audit procedures indicate that it may be necessary to reconsider the initial evaluation of the competence, capabilities and objectivity of the auditor's expert as the audit progresses.

A18.         A broad range of circumstances may threaten objectivity, for example, self-interest threats, advocacy threats, familiarity threats, self-review threats, and intimidation threats.  Such threats may be addressed by eliminating the circumstances that create the threats, or applying safeguards to reduce threats to an acceptable level.  There may also be safeguards specific to the audit engagement.

A19.         The evaluation of whether the threats to objectivity are at an acceptable level may depend upon the role of the auditor's expert and the significance of the expert's work in the context of the audit.  In some cases, it may not be possible to eliminate circumstances that create threats or apply safeguards to reduce threats to an acceptable level, for example, if a proposed auditor's expert is an individual who has played a significant role in preparing the information that is being audited, that is, if the auditor's expert is a management's expert.

A20.         When evaluating the objectivity of an auditor's external expert, it may be relevant to:

(a)                Enquire of the entity about any known interests or relationships that the entity has with the auditor's external expert that may affect that expert's objectivity.

(b)                Discuss with that expert any applicable safeguards, including any professional requirements that apply to that expert; and evaluate whether the safeguards are adequate to reduce threats to an acceptable level.  Interests and relationships that may be relevant to discuss with the auditor's expert include:

               * Financial interests.

               * Business and personal relationships.

               * Provision of other services by the expert, including by the organisation in the case of an external expert that is an organisation.

         In some cases, it may also be appropriate for the auditor to obtain a written representation from the auditor's external expert about any interests or relationships with the entity of which that expert is aware.

Obtaining an Understanding of the Field of Expertise of the Auditor's Expert (Ref: Para. 10)

A21.         The auditor may obtain an understanding of the auditor's expert's field of expertise through the means described in paragraph A7, or through discussion with that expert.

A22.         Aspects of the auditor'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 (see paragraph A17).

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

           * What assumptions and methods, including models where applicable, are used by the auditor's expert, and