Document ID: chunk:federal_register_of_legislation:F2022C01191:reg:8:p5
Version: federal_register_of_legislation:F2022C01191
Segment Type: reg
Provision Reference: reg 8 (pt 5/17)
Character Range: 18695–21794

of environmental liabilities, and site clean-up costs.

           * The interpretation of contracts, laws and regulations.

           * The analysis of complex or unusual tax compliance issues.

A2.             In many cases, distinguishing between expertise in accounting or auditing, and expertise in another field, will be straightforward, even where this involves a specialised area of accounting or auditing.  For example, an individual with expertise in applying methods of accounting for deferred income tax can often be easily distinguished from an expert in taxation law.  The former is not an expert for the purposes of this Auditing Standard as this constitutes accounting expertise; the latter is an expert for the purposes of this Auditing Standard as this constitutes legal expertise.  Similar distinctions may also be able to be made in other areas, for example, between expertise in methods of accounting for financial instruments, and expertise in complex modelling for the purpose of valuing financial instruments.  In some cases, however, particularly those involving an emerging area of accounting or auditing expertise, distinguishing between specialised areas of accounting or auditing, and expertise in another field, will be a matter of professional judgement.  Applicable professional rules and standards regarding education and competency requirements for accountants and auditors may assist the auditor in exercising that judgement.[4]

A3.             It is necessary to apply judgement when considering how the requirements of this Auditing Standard are affected by the fact that an auditor's expert may be either an individual or an organisation.  For example, when evaluating the competence, capabilities and objectivity of an auditor's expert, it may be that the expert is an organisation the auditor has previously used, but the auditor has no prior experience of the individual expert assigned by the organisation for the particular engagement; or it may be the reverse, that is, the auditor may be familiar with the work of an individual expert but not with the organisation that expert has joined.  In either case, both the personal attributes of the individual and the managerial attributes of the organisation (such as systems of quality control the organisation implements) may be relevant to the auditor's evaluation.

Determining the Need for an Auditor's Expert (Ref: Para. 7)

A4.             An auditor's expert may be needed to assist the auditor in one or more of the following:

           * Obtaining an understanding of the entity and its environment, the applicable financial reporting framework and the entity's system of internal control.

           * Identifying and assessing the risks of material misstatement.

           * Determining and implementing overall responses to assessed risks at the financial statement level.

           * Designing and performing further audit procedures to respond to assessed risks at the assertion level, comprising tests of controls or substantive procedures.

           * Evaluating the sufficiency and