Document ID: chunk:federal_register_of_legislation:F2022C01191:reg:8:p14
Version: federal_register_of_legislation:F2022C01191
Segment Type: reg
Provision Reference: reg 8 (pt 14/17)
Character Range: 44224–47247

develop an auditor's point estimate or an auditor's range for comparison with management's point estimate, the auditor's procedures may be primarily directed to evaluating the assumptions and methods, including models where appropriate, used by the auditor's expert.

A36.         ASA 540[16] discusses the assumptions and methods used by management in making accounting estimates, including the use in some cases of highly specialised, entity-developed models.  Although that discussion is written in the context of the auditor obtaining sufficient appropriate audit evidence regarding management's assumptions and methods, it may also assist the auditor when evaluating an auditor's expert's assumptions and methods.

A37.         When an auditor's expert's work involves the use of significant assumptions and methods, factors relevant to the auditor's evaluation of those assumptions and methods include whether they are:

           * Generally accepted within the auditor's expert's field;

           * Consistent with the requirements of the applicable financial reporting framework;

           * Dependent on the use of specialised models; and

           * Consistent with those of management, and if not, the reason for, and effects of, the differences.

Source Data Used by the Auditor's Expert (Ref: Para. 12(c))

A38.         When an auditor's expert's work involves the use of source data that is significant to that expert's work, procedures such as the following may be used to test that data:

           * Verifying the origin of the data, including obtaining an understanding of, and where applicable testing, the internal controls over the data and, where relevant, its transmission to the expert.

           * Reviewing the data for completeness and internal consistency.

A39.         In many cases, the auditor may test source data.  However, in other cases, when the nature of the source data used by an auditor's expert is highly technical in relation to the expert's field, that expert may test the source data.  If the auditor's expert has tested the source data, enquiry of that expert by the auditor, or supervision or review of that expert's tests may be an appropriate way for the auditor to evaluate that data's relevance, completeness, and accuracy.

Inadequate Work (Ref: Para. 13)

A40.         If the auditor concludes that the work of the auditor's expert is not adequate for the auditor's purposes and the auditor cannot resolve the matter through the additional audit procedures required by paragraph 13, which may involve further work being performed by both the expert and the auditor, or include employing or engaging another expert, it may be necessary to express a modified opinion in the auditor's report in accordance with ASA 705 because the auditor has not obtained sufficient appropriate audit evidence.[17]

Reference to the Auditor's Expert in the Auditor's Report (Ref: Para. 14-15)

A41.         In some cases, law or regulation may require a reference to the work of