Apply Now

The auditor may rely on the use of the work of an expert in circumstances where the expertize the auditor possess is not related to a specific matter of transaction recorded in financial statements and expert of that specific are is required like valuation of land and building; valuation of plant and machinery; valuation of jewelry; valuation of antiques; estimations of mining reserves; actuarial calculations of insurance; actuarial calculations of employee benefit plans; interpretation of law and regulations. When the work of expert is to be used then the auditor should evaluate the competence, capabilities and experience of the expert to be engaged. The auditor must also obtain an understanding of how the expert world work for which he is being engaged. The auditor must also evaluate the appropriateness of the expert’s work taken as audit evidence. To ascertain the mentioned matters, the auditor must discuss the matters with the engaged expert and assure that he fully understands the nature, extent and scope of the work he is being engaged for. When the auditor has used work of an expert then it is important to keep adequate working papers.

The reasons of preparing working papers are as follows:
• Working papers are considered necessary for audit quality control purposes
• Working papers provides evidence that the audit work delegated has been properly conducted
• Working Papers are an evidence that effective audit procedures has been carried out in accordance to the set audit objectives
• Working papers increases the efficiency and effectiveness of audit procedures
• Working papers contain detailed facts that were used to form auditor’s conclusion
• Working papers are used to record matters which may be significant in subsequent audit engagements.

The auditor must also consider the audit risks involved on engaging an expert.