In using the work of a specialist, an auditor of a nonissuer may refer to the specialist in the auditor’s report if, as a result of the specialist’s findings, the auditor:

Last Updated on February 3, 2022 by Admin 3

In using the work of a specialist, an auditor of a nonissuer may refer to the specialist in the auditor’s report if, as a result of the specialist’s findings, the auditor:

  • Becomes aware of conditions causing substantial doubt about the entity’s ability to continue as a going concern. 
  • Desires to disclose the specialist’s findings, which imply that a more thorough audit was performed.
  • Is able to corroborate another specialist’s earlier findings that were consistent with management’s representations.
  • Discovers significant deficiencies in the design of the entity’s internal control that management does not correct.
Explanation: 
Choice “C” is correct. The auditor may, as a result of the report or findings of the specialist, decide to add explanatory language to the auditor’s standard report or depart from an unqualified opinion. Reference to and identification of the specialist may be made in the auditor’s report if the auditor believes such reference will facilitate an understanding of the reason for the explanatory paragraph or the departure from the unqualified opinion.
Choice “B” is incorrect. The auditor should not refer to the work or findings of the specialist unless the specialist’s work results in a change to the auditor’s report.
Choice “C” is incorrect. The auditor should not refer to the work or findings of the specialist unless the specialist’s work results in a change to the auditor’s report.
Choice “D” is incorrect. The identification of significant deficiencies in the design of the client’s internal control would not result in a change to the auditor’s report. The auditor should not refer to the work or findings of the specialist unless the specialist’s work results in a change to the auditor’s report.
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