Document ID: chunk:federal_register_of_legislation:F2022C01189:reg:7:p17
Version: federal_register_of_legislation:F2022C01189
Segment Type: reg
Provision Reference: reg 7 (pt 17/21)
Character Range: 55709–58902

the matter for which that expert's work will be used, including any areas of specialty within that expert's field.  For example, a particular actuary may specialise in property and casualty insurance, but have limited expertise regarding pension calculations.

           * The management's expert's competence with respect to relevant accounting requirements, for example, knowledge of assumptions and methods, including models where applicable, that are consistent with the applicable financial reporting 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 management's expert as the audit progresses.

A52.         A broad range of circumstances may threaten objectivity, for example, self‑interest threats, advocacy threats, familiarity threats, self‑review threats and intimidation threats.  Safeguards may reduce such threats, and may be created either by external structures (for example, the management's expert's profession, legislation or regulation), or by the management's expert's work environment (for example, quality control policies and procedures).

A53.         Although safeguards cannot eliminate all threats to a management's expert's objectivity, threats such as intimidation threats may be of less significance to an expert engaged by the entity than to an expert employed by the entity, and the effectiveness of safeguards such as quality control policies and procedures may be greater.  Because the threat to objectivity created by being an employee of the entity will always be present, an expert employed by the entity cannot ordinarily be regarded as being more likely to be objective than other employees of the entity.

A54.         When evaluating the objectivity of an expert engaged by the entity, it may be relevant to discuss with management and that expert any interests and relationships that may create threats to the expert's objectivity, and any applicable safeguards, including any professional requirements that apply to the expert; and to evaluate whether the safeguards are adequate.  Interests and relationships creating threats may include:

           * Financial interests.

           * Business and personal relationships.

           * Provision of other services.

Obtaining an Understanding of the Work of the Management's Expert (Ref: Para. 8(b))

A55.         An understanding of the work of the management's expert includes an understanding of the relevant field of expertise.  An understanding of the relevant field of expertise may be obtained in conjunction with the auditor's determination of whether the auditor has the expertise to evaluate the work of the management's expert, or whether the auditor needs an auditor's expert 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