What is an auditor's expert?
The FRC's 2024 thematic review on the audit of estimates flagged a recurring pattern. Files contained the valuer's CV and the valuer's report, but no evaluation of objectivity and no evaluation of the valuer's methodology. The team had accepted the output because the output looked professional. "Appears reasonable. Waive further pursuit." That is the finding that generates the most review notes in this area, and it comes up on roughly half of the engagements where an expert is used.
ISA 620.6 (a) defines an auditor's expert as an individual or organisation with expertise in a field other than accounting or auditing, whose work in that field is used to obtain sufficient appropriate audit evidence. Property valuers, actuaries, environmental scientists, and IT security specialists are the common ones. The auditor engages or employs the expert directly. The expert's work becomes part of the audit evidence.
ISA 620.5 is unambiguous. The auditor retains sole responsibility for the audit opinion. Using an expert does not transfer or dilute that responsibility. The expert provides evidence. The auditor evaluates it. Before engaging anyone, ISA 620.9 requires the auditor to evaluate three things: competence (relevant qualifications and relevant experience), capability (ability to complete this specific engagement in the required timeframe), and objectivity (relationships or circumstances that create threats). ISA 620.11 requires the scope, nature, and objectives of the work to be agreed in writing. Do not skip the written agreement. The file should tell a story, and the engagement terms are where that story starts.
Key Points
- The auditor retains full responsibility for the audit opinion, even when relying on an expert's work.
- ISA 620.9 requires evaluating the expert's competence, capabilities, and objectivity before using their work.
- The agreement must be documented, ideally in writing per ISA 620.11 .
- An auditor's expert is not the same as a management's expert — different ISAs govern each.
Why it matters in practice
At firms like ours the first failure pattern we see is objectivity evaluation skipped entirely. Competence gets assessed because the qualifications are on the CV. Capability gets assessed because the scope is in the engagement letter. Objectivity requires the auditor to actively look for relationships between the expert and the client, or the expert and the firm, that could create threats. ISA 620.9 requires all three, not the two that are easy.
The second recurring finding is teams treating the expert's report as audit evidence without evaluating the methodology. A well-formatted report from a qualified specialist is not sufficient. ISA 620.12 (a) requires the auditor to evaluate the relevance and reasonableness of the expert's findings, including the assumptions used, the methods applied, and whether the conclusions are consistent with other audit evidence. Nobody enjoys challenging a valuer's cap rate when the valuer has 20 years more experience in that market than the audit team combined, but skipping that challenge is how files get flagged.
Worked example: Navarro Logística S.L.
Client: Spanish logistics company, FY2024, revenue €62M, IFRS reporter. Four warehouse properties carried at fair value under IAS 40.33 , total €23.5M (38% of total assets).
Management's valuer: Pérez Tasaciones S.L. values the portfolio at €24.8M using a capitalisation rate of 5.9% based on two comparable transactions.
Auditor's expert: The engagement team engages Montero & Asociados, a RICS-accredited valuation firm with no prior relationship with the client. Montero uses four comparable transactions and arrives at a capitalisation rate of 6.8%, producing a range of €22.1M–€24.0M.
Evaluation: Management's €24.8M exceeds the top of the auditor's expert's range. The key difference is the capitalisation rate: 5.9% vs 6.8%, driven by the number and quality of comparables. The auditor evaluates Montero's methodology (four comparables with full data vs Pérez's two) and concludes the auditor's expert's range is more supportable.
Resolution: Management adjusts to €24.0M (the top of Montero's range). No misstatement remains.
Auditor's expert vs management's expert
| Dimension | Auditor's expert | Management's expert |
|---|---|---|
| Who engages | The auditor | Management |
| Governing ISA | ISA 620 | ISA 500.8 |
| Purpose | Help auditor obtain evidence | Help management prepare statements |
| Responsibility | Auditor evaluates, retains opinion responsibility | Management responsible for resulting figures |
| Objectivity evaluation | Required under ISA 620.9 | Required under ISA 500.8 |
Key standard references
- ISA 620.6 (a): Defines auditor's expert.
- ISA 620.5 : Auditor retains sole responsibility for the opinion.
- ISA 620.7 : Auditor determines whether to use an expert.
- ISA 620.9 : Evaluate competence, capability, and objectivity.
- ISA 620.11 : Agree scope and terms in writing.
- ISA 620.12 : Evaluate adequacy of the expert's work.
Related terms
Related reading
Frequently asked questions
Does using an auditor's expert reduce the auditor's responsibility for the opinion?
No. ISA 620.5 is unambiguous: the auditor retains sole responsibility for the audit opinion, and that responsibility is not reduced by the auditor's use of an expert.
What must the auditor evaluate about an auditor's expert?
ISA 620.9 requires evaluating competence (relevant qualifications and experience), capability (can they do this specific job in this timeframe), and objectivity (do any relationships compromise independence).