Document ID: chunk:federal_register_of_legislation:F2022C01191:reg:8:p6
Version: federal_register_of_legislation:F2022C01191
Segment Type: reg
Provision Reference: reg 8 (pt 6/17)
Character Range: 21490–24544

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 appropriateness of audit evidence obtained in forming an opinion on the financial report.

A5.             The risks of material misstatement may increase when expertise in a field other than accounting is needed for management to prepare the financial report, for example, because this may indicate some complexity, or because management may not possess knowledge of the field of expertise.  If in preparing the financial report management does not possess the necessary expertise, a management's expert may be used in addressing those risks.  Relevant controls, including controls that relate to the work of a management's expert, if any, may also reduce the risks of material misstatement.

A6.             If the preparation of the financial report involves the use of expertise in a field other than accounting, the auditor, who is skilled in accounting and auditing, may not possess the necessary expertise to audit that financial report.  The engagement partner is required to determine that the engagement team, and any auditor's experts who are not part of the engagement team, collectively have the appropriate competence and capabilities, including sufficient time, to perform the audit engagement.[5]  Further, the auditor is required to ascertain the nature, timing and extent of resources necessary to perform the engagement.[6]  The auditor's determination of whether to use the work of an auditor's expert, and if so when and to what extent, assists the auditor in meeting these requirements.  As the audit progresses, or as circumstances change, the auditor may need to revise earlier decisions about using the work of an auditor's expert.

A7.             An auditor who is not an expert in a relevant field other than accounting or auditing may nevertheless be able to obtain a sufficient understanding of that field to perform the audit without an auditor's expert.  This understanding may be obtained through, for example:

           * Experience in auditing entities that require such expertise in the preparation of their financial report.

           * Education or professional development in the particular field.  This may include formal courses or discussion with individuals possessing expertise in the relevant field for the purpose of enhancing the auditor's own capacity to deal with matters in that field.  Such discussion differs from consultation with an auditor's expert regarding a specific set of circumstances encountered on the engagement where that expert is given all the relevant facts that will enable the expert to provide informed advice about the particular matter.[7]

           * Discussion with auditors who have performed similar engagements.

A8.             In other cases, however, the auditor