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Sometimes an auditor simply doesn't have the specialist knowledge needed to audit a particular area — and that's perfectly fine. SA 620 tells you exactly what to do when you bring in an outside expert to help gather audit evidence. Think of it this way: Rajesh & Co. is auditing a real-estate developer with a large land bank. The auditor cannot personally value 50 acres of farmland in Nashik — so he brings in a registered valuer. That expert is the auditor's expert under SA 620.

The single most important rule in SA 620: using an expert does not reduce the auditor's responsibility one bit. The audit opinion still belongs to the auditor. The standard draws a sharp line between two types of expert. An internal expert works within the audit firm (e.g., an in-house actuary). An external expert is hired from outside. Both are covered by SA 620 — but a management-appointed valuer or actuary is a management's expert and falls under SA 500 (audit evidence), not SA 620. Students mix these up constantly in exams.

Before relying on the expert's work, the auditor must assess three things: competence (does the person have the right qualifications and experience?), capability (can they do this specific job right now — time, resources, access?), and objectivity (are there any conflicts of interest?). These three words appear verbatim in exam questions — memorise them together.

The auditor must also agree the scope of work with the expert — what needs to be done, the methods to be used, the assumptions, and what the final output will look like. Finally, the auditor evaluates the adequacy of the expert's work: Are the assumptions reasonable? Is the source data reliable? Does the conclusion make sense in the context of the audit? If the auditor is not satisfied, they negotiate with the expert, perform additional procedures, or — in extreme cases — modify their opinion. This section is asked frequently as a 4-mark or 6-mark theory question in Paper 5.

📊 Worked example

Example 1 — Identifying the right standard

The auditor of Sunrise Builders Pvt. Ltd. is auditing land valued at ₹12,50,00,000 (₹12.5 crore) on the balance sheet. Management appointed Mr. Iyer, a registered valuer, and gave his report to the auditor. The auditor's own firm also has an in-house structural engineer who reviewed the construction WIP worth ₹3,75,00,000 (₹3.75 crore).

Working:

  • Mr. Iyer was appointed by management → he is a management's expert → governed by SA 500, not SA 620.
  • The in-house structural engineer works within the audit firm → he is an auditor's internal expert → governed by SA 620.

Answer: SA 620 applies only to the in-house engineer's work. The valuer's report is treated as audit evidence under SA 500.

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Example 2 — Evaluating an expert's work

Ms. Sharma is auditing a life insurance company. She engages an external actuary to value the policy liabilities of ₹45,00,00,000 (₹45 crore). The actuary assumes a discount rate of 6.5% p.a. The RBI benchmark for similar instruments is 7.2% p.a.

Working:

  • Step 1 — Competence/Objectivity: Actuary holds FIAI qualification, no conflict of interest. ✓
  • Step 2 — Scope agreed: valuation method (prospective), data source (policy register), output (actuarial certificate). ✓
  • Step 3 — Evaluate work: The 6.5% assumption is below the 7.2% market benchmark. A lower discount rate inflates the liability. Ms. Sharma must ask the actuary to justify this assumption or recompute at 7.2%.

Answer: The expert's work is not yet adequate. Ms. Sharma must investigate the assumption before relying on the ₹45 crore figure.

⚠️ Common exam mistakes

  • Confusing management's expert with auditor's expert. Students apply SA 620 to both. SA 620 covers only experts engaged by the auditor. If management appointed the expert and handed the report to the auditor, that's SA 500 territory.
  • Thinking the auditor can shed responsibility. Don't write 'the auditor is not responsible since an expert was used' — that will lose you all marks. The auditor's responsibility for the opinion is absolute and cannot be delegated.
  • Forgetting the three-part assessment. Exam questions often ask 'what should the auditor consider before using an expert?' The expected answer is competence, capability, and objectivity — all three, not just qualifications.
  • Skipping scope agreement. Students describe the expert's work but forget that SA 620 requires the auditor to formally agree the scope, methods, and form of the report with the expert before the work begins.
  • Treating a qualified expert's report as automatically sufficient. Even a highly credentialled expert can use unreasonable assumptions or poor source data. The auditor must still evaluate whether the work is adequate for audit purposes — a well-credentialled actuary with a flawed discount rate assumption is not sufficient evidence.
📖 Reference: SA 620 — Institute of Chartered Accountants of India
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