An audit specialist can be defined as a third-party source that can help the auditor to gain substantial evidence about a particular matter at hand. The audit specialist can be defined as a person who has knowledge about factors and features about which the auditor does not have sufficient knowledge.
These specialists can be people outside the scope of the firm but should be reliable enough so that their work and declaration can be used in the audit process itself.
The main reasons for using an audit specialist are:
- Firstly, it can be seen that the auditor and the company staff have limited knowledge when it comes to certain things. As a matter of fact, it can be seen that there are certain issues within the audit process that need a deeper understanding. These can be issues pertaining to technical aspects of the business, which the auditor might not necessarily know of. For example, in an audit of a private airline, he might not know the maintenance cost associated with certain planes.
- Secondly, in issues that need explanation or clarity, it is often a good idea to ensure that the auditor is able to gather plenty of evidence, without putting the overall disclosure of the audit engagement at stake.
- Under professional skepticism, the auditor is required to ensure that he identifies all the red flags and confusions, and then designs audit procedures to get to the reasonable surety that there are no material misstatements within the company’s operations.
- The use is specialists also occurs in situations and circumstances where the topic of interest is not only an audit but includes certain delivery-based recommendations that are important for the task at hand. Therefore, for recommendations and analysis on certain matters pertaining to the organization, it is often a good idea to rely on external specialists that can provide better-tailored advice for the company.
Selection of the Audit Specialist
However, when the auditor is using the work of an audit specialist, he should also ensure that the following qualifications and the scope of the specialist are accounted for. This includes that the following aspects of the auditor’s work are considered in this regard. For example:
- Professional certification or the license that is proof of competence of the specialist
- The reputation of the specialist, and if he is credible enough to be relied on for gathering pieces of audit evidence.
- The specialists’ prior experience in providing analysis and recommendations in the designated area of experience.
Determining the Scope of Work of Specialist
In addition to the points that are mentioned above, it can also be seen that the auditor is supposed to ensure that the following aspects pertaining to the work needed by the specialist are accounted for. This mainly includes:
- The underlying objectives and scope of specialist work
- The specialist relationship with the client
- The underlying methods or assumptions that are used
- A comparative analysis of matters and assumptions that are used in the previous period
- The extent to which the work is carried out can be regarded as appropriate for the purpose
- The form and the content of specialist findings can help the auditor to gain substantial evidence for the purpose
Disclosure of Audit Specialist
When auditors use the work that has been carried out by the audit specialist, it is also important to disclose this in the financial statements.
This is an integral part, predominantly because of the reason that this information is supposed to be disclosed to the stakeholders so that the users of the financial statements know that information from a specialist has been used in order to reach a particular conclusion.
Therefore, it can be seen that an Audit Specialist can be regarded as an additional important part of the audit process, because of the fact that it helps to gather the information that auditors themselves don’t have knowledge about.
However, it is important to also recognize the fact that audit specialists can only be used when it’s required, and they should always be used in situations and circumstances when the auditor’s knowledge is also limited to the respective matters at hand.
Hence, the audit specialist can be utilized, and then proper disclosure is supposed to be made in the financial statements. Additionally, the credibility and integrity of the audit specialist should be checked and verified by the auditor too. This is to ensure that the information provided is authentic, and can reasonably help the auditors in effective decision making.