When planning the audit, the auditor should consider the extent of involvement of the client's internal auditors in the performance of the audit. Although internal auditors must maintain objectivity and integrity, they are not independent of the client, their employer. Thus, the independent external auditor cannot share with the internal auditor any of the responsibility for audit decisions, judgments, or assessments made as part of the audit (such as those concerning materiality or accounting estimates), or any of the responsibility for issuing the report.
An auditor may decide during planning that it is necessary to use the work of a specialist in order to obtain competent audit evidence related to balances, transactions, or disclosures that are material to the fair presentation of financial statements. In addition, the entity may use the work of a specialist to assist the entity in the preparation of the financial statements.
A specialist is a person or firm with special skills in a field other than accounting or auditing (e.g., actuaries, appraisers, attorneys and engineers).
Auditor's Specialist: An auditor's specialist is an individual or organization whose work in a field other than accounting or auditing is used by the auditor to assist in obtaining sufficient appropriate audit evidence. An auditor's specialist may be an internal specialist employed by the auditor's firm or a network firm, or an external specialist.
Management's Specialist: Management's specialist is an individual or organization whose work in a field other than accounting or auditing is used by the entity to assist the entity in preparing the financial statements.
When planning the audit, the auditor must consider the impact of information technology on the entity's financial information. Information technology auditing is a specialized area of auditing; therefore, someone possessing specialized knowledge in information technology participating in the audit is called an IT auditor, not a specialist.
The audit engagement partner must consider the appropriate competence and capabilities expected of the engagement team as a whole, which includes technical expertise, including expertise with relevant IT and specialized areas of accounting or auditing. IT auditors may be added to the engagement team in order to assess or test internal controls or to address risks of misstatements. IT auditors are considered members of the engagement team.
During planning, an auditor of group financial statements (group auditor) may decide that it is necessary to use the work of a component auditor. The requirements discussed below apply regardless of whether the group auditor decides to make reference to the component auditor in the auditor's report on the group financial statements or to assume responsibility for the work of component auditors.
A component auditor performs work on the financial information of a component that will be used as audit evidence for a group audit. A component auditor may be part of the group engagement's firm or a network firm, or another firm.
For which of the following judgments may an independent auditor share responsibility with an entity's internal auditor who is assessed to be both competent and objective?