ISA 620 : Using the Work of an Auditor's Expert

What ISA 620 actually requires (and what most files miss)

We see the same pattern on almost every engagement that involves an expert. The team identifies the need, engages someone qualified, receives a report, and files it. Done. But ISA 620 doesn’t treat the expert’s report as the endpoint. It treats the report as raw material that the auditor must evaluate, because the expert’s work is audit evidence, and audit evidence requires assessment. The report is where the work starts, not where it ends.

ISA 620 applies wherever the auditor needs expertise outside accounting and auditing. Property valuations, actuarial calculations, environmental liabilities, mineral reserves. At firms like ours, property valuations and actuarial calculations account for the majority of expert engagements. The less common areas (environmental provisions, legal interpretations of contract terms) generate more review notes when they do appear, because teams have less muscle memory for evaluating work they rarely see. I’ve watched a senior spend two hours trying to assess an environmental remediation estimate with no frame of reference for whether the assumptions were even in the right order of magnitude. That’s the moment you know an expert was needed three weeks ago.

Auditor’s expert vs. management’s expert

The most common mistake we see is teams confusing these two categories, or trying to use management’s expert as the auditor’s expert because it saves the cost of a second engagement. They’re not interchangeable. The confusion creates real inspection risk, and it happens often enough that regulators have stopped treating it as an honest error.

There’s also the internal vs. external distinction. An auditor’s internal expert sits within the firm (the in-house valuation team, for instance) and is subject to the firm’s quality management policies under ISQM 1 . An auditor’s external expert is someone outside the firm, engaged for a specific engagement. Mid-tier firms almost always use external experts because they don’t have in-house valuation or actuarial teams. Larger firms default to internal specialists, which simplifies the objectivity assessment but introduces a different problem: the internal expert may have also advised the same client on a non-audit engagement. That self-review threat needs documenting on the file, and I’ve seen partners wave it away with a single sentence when it deserved a full paragraph of analysis.

When you actually need an expert (and when you don’t)

ISA 620.7 requires the auditor to determine whether expertise outside accounting and auditing is needed. In theory, this is a risk-based decision driven by the nature of the matter and the RMM, weighed against whether the team has the capability to evaluate the area without specialist input. In practice, the decision usually comes down to one question: can we look at this number and credibly say we understood it? If the answer is no, you need an expert. If the answer is “probably,” you also need an expert.

Property valuations and actuarial calculations are the obvious cases. But we’ve also engaged experts for environmental liability estimates, mineral reserves, complex tax positions, and legal interpretations of contract terms that affected revenue recognition. The real question isn’t whether the area appears on a standard list of expert topics. It’s whether your team has the competence to evaluate the assumptions and methods used. If a senior on the team can’t explain why a 6.5% capitalisation rate is or isn’t appropriate for a warehouse in Antwerp, you need someone who can.

One thing that catches people off guard: the decision to not engage an expert also needs documenting. If investment property is 87% of total assets and you don’t engage a valuation specialist, the file needs to explain why the team’s own capabilities were sufficient. A blank space where the rationale should be is exactly the kind of gap inspectors target. I think this is one of the most underappreciated documentation requirements in the standards, because the absence of an expert is an invisible decision that only becomes visible when someone asks about it.

Competence and objectivity: where most files fall short

This is the finding that generates the most review notes. Not because teams skip the assessment, but because they do it superficially. A one-line note saying “Expert is RICS-qualified with 15 years of experience” technically addresses ISA 620.9 , but it doesn’t demonstrate that the auditor actually evaluated whether those qualifications are relevant to this specific engagement. A surveyor who values shopping centres may not be appropriate for a portfolio of industrial warehouses. Competence is specific to the type of work and the market in question.

What the competence assessment should cover

ISA 620.9 requires the auditor to evaluate professional certification or licensing, experience with the specific type of work (not just the general field), whether the expert’s capabilities match the particular matter, and whether they have worked in the relevant market. In practice, we check whether the expert has valued comparable assets in the same geography. A Belgian commercial property specialist is not automatically suitable for a Dutch residential portfolio, even if their credentials look identical on paper. The file needs to show that connection between the expert’s track record and the specific engagement.

Objectivity: the part everyone assumes is fine

For internal experts, objectivity is theoretically supported by the firm’s quality management policies. But if the internal valuation team also advised the same client on a transaction, you have a self-review threat that no quality management policy can eliminate. The file needs to document that the auditor considered this and concluded it wasn’t an issue (or that it was, and engaged an external expert instead).

For external experts, the assessment must cover interests and relationships: financial interest in the entity, business relationships with management, prior involvement as management’s expert on the same matter, and any fee arrangements that could create an advocacy threat. We’ve seen files where the objectivity assessment was a single sentence. That’s not enough. The AFM has identified deficiencies in this area repeatedly, particularly where the same firm provides both audit and valuation services. There is a reasonable debate about whether a success-fee arrangement with an external expert (where the expert’s fee depends on the valuation outcome) disqualifies them outright or merely creates a threat that requires safeguards. We think it disqualifies them, because no safeguard can fully offset the incentive to deliver the number the client wants. Others argue that disclosure plus a cap on the variable component is sufficient. The standard doesn’t settle this directly, which is why documenting your reasoning matters more than the conclusion.

Setting up the agreement (and why vague scopes cause problems)

ISA 620.11 requires a formal agreement covering scope, deliverables, communication protocols, and confidentiality. For external experts, this means a signed engagement letter. For internal experts, the firm’s existing policies may cover most of it, but the scope still needs to be explicit on the file.

The common mistake here is scoping too broadly. “Review management’s property valuation” is not a scope. What specific properties? What assumptions should the expert assess? What range of capitalisation rates would the auditor consider acceptable? Without these parameters, the expert delivers a generic “the valuation appears reasonable” report, and the auditor has nothing to work with when the review question comes: “How did you evaluate whether 5.8% is an appropriate cap rate for this specific property?” At that point, the expert’s report is wallpaper on the file. It looks like evidence but doesn’t function as evidence.

At firms like ours, the best engagement letters specify exactly which assets or estimates the expert should review, which assumptions the auditor wants tested, what format the report should take, whether the expert should communicate directly with management, and what the expected turnaround is relative to the audit timeline. That communication point matters more than people think. If the expert calls management’s FD to ask for supporting data without going through the audit team, you lose control of the information flow. We’ve seen situations where the expert and management aligned on assumptions before the audit team even saw the report. Frustrating, and avoidable with a single clause in the engagement letter.

Evaluating the expert’s work (not just filing the report)

This is where most teams fall down. ISA 620.12 requires the auditor to evaluate whether the expert’s work is adequate for the audit’s purposes. What actually happens on many engagements is that the report arrives two days before the sign-off deadline, someone reads the conclusion, confirms it supports the number in the FS, and files it. That is ticking and bashing, not evaluation.

Evaluation means asking whether the findings are reasonable in context and consistent with other audit evidence. If the expert says the portfolio is worth €48M and you have comparable transaction data suggesting €44M, that inconsistency needs resolution before you can use the expert’s work as evidence. It also means assessing assumptions and methods. A discounted cash flow model using a 3% rental growth assumption in a market where rents have been flat for two years is not automatically wrong, but the file needs to show that the auditor identified the assumption and considered whether it was reasonable. This is the competence paradox at the heart of ISA 620 : you hired the expert because you lack the expertise, and now you need enough understanding to challenge them intelligently. The standard resolves this by requiring “sufficient understanding” rather than replication of the expert’s knowledge, but in practice that line is hard to draw.

Source data matters too. Did the expert use data from the entity? If so, did anyone test whether that data was complete and accurate? We’ve reviewed files where the expert relied on a rent roll provided by management that hadn’t been reconciled to the lease agreements. The expert’s conclusions were technically sound, but they were built on unverified inputs. That’s not sufficient appropriate evidence under ISA 500 . The file should tell a story: here is what the expert did, here is what we checked, here is what we challenged, and here is why we concluded the work was adequate.

If the work isn’t adequate, ISA 620.13 gives you two paths: agree additional work with the expert, or perform additional audit procedures yourself. You cannot just accept it and move on. And honestly, going back to the expert for more work is the option teams avoid because it costs money and delays the timeline. That avoidance is exactly how the inadequate-evaluation finding ends up in the inspection report.

Why you can’t mention the expert in an unmodified report

ISA 620.14 –15 is straightforward but often misunderstood. If the opinion is unmodified, no reference to the expert. The reason: a reference might be read as the auditor distancing themselves from the conclusion (“we relied on someone else for this part”), which undermines the entire premise of ISA 620 . The auditor’s opinion is the auditor’s opinion, regardless of who performed the underlying work.

Where a reference becomes relevant is in a modified opinion. If the auditor qualifies or disclaims because of an issue related to the expert’s work, the reference may be necessary to explain the basis for modification. But even then, ISA 620.15 requires the auditor to state that the reference does not reduce the auditor’s responsibility. You used the expert. You are still responsible. Those two facts coexist, and the report language needs to reflect both.

Worked example: Peeters Immobilien NV

Peeters Immobilien NV is a Belgian real estate company with €55M total assets and a portfolio of 12 commercial properties. Year-end is 31 December. The company reports under Belgian GAAP and carries its investment properties at fair value. Management engaged a property surveyor (management’s expert) to value the portfolio at €48M. The audit team needs an auditor’s expert to evaluate the valuation methodology and key assumptions.

The EP identifies the need under ISA 620.7 . Investment property is €48M (87% of total assets), the valuation involves significant estimation uncertainty across cap rates, rental growth, vacancy, and lease expiry assumptions, and the team doesn’t have in-house property valuation capability. External specialist it is.

Documentation note: record why an expert is needed. The file should cover significance of amount, complexity of inputs, team’s lack of specialist capability, and the specific RMMs the expert’s work will address.

The EP evaluates the proposed expert under ISA 620.9 . She holds a RICS qualification, has 15 years of Belgian commercial property valuation experience, and has valued comparable mixed-use portfolios in the Flanders region. No financial interest in Peeters Immobilien NV. No prior involvement as management’s valuer for this entity. Competence and objectivity: documented and cleared.

Documentation note: file credentials, independence inquiry responses, the EP’s conclusion, and the basis for that conclusion. Retain evidence of the inquiry about interests and relationships.

The engagement letter scopes the work to the six highest-value properties (combined value €32M), specifying that the expert should assess whether cap rates and rental growth assumptions fall within a reasonable range for the Belgian commercial market, and flag any properties where the valuation sits outside her expected range.

Documentation note: file the signed letter with scope, deliverables, timeline, confidentiality, and the expert’s access to management’s valuation report and underlying data ( ISA 620.11 ).

The expert’s report concludes that 5 of 6 properties have cap rates within the market range (6.2%–7.8% versus the expert’s range of 6.0%–8.0%). For one property (a warehouse in Antwerp), management applied a 5.8% cap rate. The expert considers this aggressive given the property’s age and single-tenant concentration. Her range for this property: 6.5%–7.5%, implying a potential overvaluation of €1.1M.

Documentation note: file the report. Document the team’s evaluation of findings, including consistency checks against lease agreements, market data, and comparable transactions. Don’t just note the conclusion. Walk through the key assumptions and record why you consider them reasonable or not.

The complication

Two weeks after the expert’s report, management announces that the Antwerp warehouse’s sole tenant has exercised a break clause effective June of the following year. This changes everything. A single-tenant warehouse with a break notice is not the same asset the expert valued. The cap rate, the vacancy assumption, the rental growth projection all need revisiting. The team now faces a question ISA 620 doesn’t answer directly: do you go back to the expert for a revised valuation, or do you adjust the scope and perform additional procedures yourself?

In our view, the right call depends on how material the impact is. A vacant warehouse in the Antwerp industrial market might command a cap rate of 8.5%–9.5%, which would reduce the carrying value by €2.5M–€3.2M (well above PM). So the team goes back to the expert, agrees an expanded scope covering the break clause scenario, and gets a revised report. The partner pushes back on the additional cost. The manager explains that the alternative is signing off on a number that is almost certainly misstated by more than PM, which is worse. Management adjusts the cap rate to 6.5% and adds a vacancy provision of €1.4M. After the adjustments, the remaining difference of €300K lands on the summary of uncorrected misstatements and gets cross-referenced to the ISA 450 evaluation.

Without the complication, this file would have been clean and straightforward. With it, the file demonstrates that the team used the expert’s work as an evidence-gathering procedure (not as an outsourced opinion) and responded to a changed circumstance rather than rolling forward the original conclusion. That’s what a reviewer wants to see. It’s also the kind of file that makes you proud of the work rather than just relieved it’s done.

Practical checklist for ISA 620 engagements

Where teams get it wrong (and why it keeps happening)

The same mistakes appear in inspection reports year after year. Not because teams are careless, but because the economic incentives push in the wrong direction. Expert engagements cost money. Challenging an expert’s report takes time the budget doesn’t account for. The partner doesn’t want to spend another €5,000 on a revised valuation report when the original one supports the number in the FS. So teams take shortcuts, and regulators write up the shortcuts, and the following year the same shortcuts appear on different engagements.

The first shortcut: filing the objectivity assessment as an afterthought. The AFM has flagged this repeatedly. “Expert is independent” is not an assessment. The file needs to show that the auditor inquired about interests and relationships and documented a reasoned conclusion. This matters most when the audit firm also provides valuation services to the same client, which is exactly the scenario the AFM keeps finding.

The second shortcut: accepting the expert’s report without challenge. The FRC’s 2025 inspection cycle listed “weaknesses in evaluation and challenge of valuation assumptions” as a top finding across Tier 2 and Tier 3 firms (FRC Annual Review of Audit Quality 2025, pp. 16–17). What actually happens is familiar to anyone who has worked on a year-end with a tight sign-off deadline: the report arrives, the manager confirms the conclusion matches management’s number, and it gets filed. Nobody asked whether the cap rate was appropriate for the specific property type, whether the rental growth assumption reflected actual market conditions, or whether the expert’s source data had been tested. The report landed on the file like a stamp of approval rather than a piece of evidence requiring assessment.

The third shortcut: using management’s expert as a substitute for the auditor’s own evaluation. If management engaged the surveyor, that surveyor is management’s expert under ISA 500 , not the auditor’s expert under ISA 620 . Treating them as interchangeable is a category error that creates a self-review threat the file cannot resolve.

We think the root cause is that firms budget for the expert engagement but not for the auditor’s evaluation of the expert’s work. That’s the perverse incentive at the centre of this standard: ISA 620 requires evaluation, but the fee structure doesn’t price evaluation in, because the evaluation hours are invisible to the client and hard to justify on a fixed-fee engagement. Until firms start scoping the evaluation as a separate line item in the audit budget, the inspection findings will keep repeating.

Related content

Our auditor’s expert glossary entry covers the key definitions and the ISA 620 requirements in a shorter format. If you’re working on engagements with expected credit loss calculations, the IFRS 9 ECL calculator helps test the reasonableness of management’s model inputs, which often require expert involvement under ISA 620 . Because most expert engagements arise in the context of accounting estimates, our ISA 540 guide covers how the two standards work together in practice.

ISA 620 in your jurisdiction

COS 620 in the Netherlands follows ISA 620 closely. AFM inspections have flagged deficiencies in objectivity assessments (particularly where the same firm provides audit and valuation services) and insufficient challenge of expert assumptions. If you’re on a Dutch engagement with investment property, expect the AFM to look at this area.

In Germany, IDW PS 620 adapts the international standard. German practice frequently uses Sachverständige for property valuations, actuarial work, tax matters, and environmental assessments. WPK inspections focus on two things: whether the auditor documented an adequate competence and objectivity evaluation, and whether the expert’s findings are consistent with other evidence on the file.

ISA (UK) 620 adds PIE-specific requirements. For public interest entities, the auditor must obtain a written independence confirmation from external experts and communicate to the audit committee when an external expert was used. The FRC has been vocal about insufficient challenge of valuation assumptions, making this a likely focus area in any FRC inspection that involves fair value estimates.

In France, NEP 620 implements ISA 620 with the usual French distinction between the commissaire aux comptes’s use of internal specialists and external experts. H3C inspections examine whether the commissaire aux comptes maintained appropriate scepticism when evaluating expert work, with particular attention to complex fair value measurements.

Frequently asked questions

Does a tax specialist within the audit firm count as an auditor’s expert?

It depends on what they’re doing. ISA 620 excludes persons with expertise in accounting or auditing from the definition. Tax specialists sit in a grey area. If their work involves application of tax law (say, interpreting transfer pricing rules for a cross-border structure), they’re probably an expert under ISA 620 . If they’re reviewing the tax provision as part of the audit (accounting work), they’re a member of the engagement team. Most firms have internal policies that draw this line, but we’ve seen reasonable practitioners disagree on borderline cases. One partner might classify the same tax specialist as an expert; another might treat them as engagement team. Neither is obviously wrong, which is why documenting the rationale matters more than the classification itself.

Can the auditor “agree to disagree” with the expert?

No. If the expert’s findings are inconsistent with other audit evidence or the auditor concludes the work is inadequate, the inconsistency must be resolved. ISA 620.13 gives you two real paths: agree additional work with the expert, or perform additional audit procedures yourself. If neither resolves the issue, you conclude that management’s estimate may be misstated and consider the effect on the auditor’s report. What you cannot do is shrug and file the disagreement. That’s not professional scepticism. That’s avoidance.

How much does the auditor need to understand about the expert’s field?

You don’t need to replicate the expert’s technical knowledge. ISA 620.8 uses the phrase “sufficient understanding” to determine the scope of the work and evaluate whether the findings are reasonable. In practice, that means you should be able to have an informed conversation with the expert about why they chose a particular method, what assumptions drove the conclusion, whether those assumptions are consistent with what you know about the entity, and whether a different method would have produced a materially different result. If you can’t ask those questions, you don’t understand enough. The second-order point here is that “sufficient understanding” is also what separates a genuine evaluation from a rubber stamp, and most inspection findings in this area come down to the auditor not having enough understanding to ask the right questions in the first place.

What happens when the auditor’s expert and management’s expert reach different conclusions?

This happens more often than you’d expect, particularly on property valuations where cap rates are inherently judgmental. You need to understand the reason for the difference: different assumptions, different methods, different data, or different interpretations of the same data. Sometimes the difference is immaterial and lands on the summary of uncorrected misstatements. Sometimes it’s material and forces a conversation with management about adjustments. Either way, the resolution goes on the file. I’d add that when the two experts are within a few percentage points of each other, management almost always argues that their expert is right and the difference is a matter of professional judgment. That argument can be valid. But it can also be a way of avoiding an adjustment, and the auditor needs to decide which one it is.

Further reading and source references

• IAASB Handbook 2024: ISA 620 full text, including the appendix on agreement considerations between auditor and expert.
• ISA 500 (Audit Evidence): addresses management’s experts (paras. A34–A48).
• ISA 540 (Revised): Auditing Accounting Estimates, frequently involving both management’s and auditor’s experts.
• ISA 220 (Revised): Quality Management, relevant to the use of internal experts as part of the engagement team.
• ISQM 1 : Quality Management for Firms, covering the firm-level policies that apply to internal experts.

This guide reflects the ISA 620 text as published in the IAASB 2024 Handbook. National implementations may include additional requirements. Always consult the applicable national standard alongside the international text. This content is for educational purposes and does not constitute legal or professional advice.

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