Requirement (b) focussed on the use of an auditor’s expert in obtaining evidence in respect of the fair value of a portfolio of financial instruments. Unfortunately very few answers performed satisfactorily on this requirement, which was to explain the procedures that should be performed in evaluating the adequacy of the auditor’s expert’s work, for 5 marks.

Most answers ignored the requirement as given in the question and instead discussed how the audit firm should evaluate the independence and competence of the expert – though the question stated that this had already been confirmed by the audit firm. This is a classic example of candidates answering the question they would like to have been asked, rather than what was actually asked for, and meant that many answers scored no marks at all on this requirement.

The few who answered this requirement appropriately tended to score highly, with answers mirroring the requirements of ISA 620 Using the Work of an Auditor’s Expert, discussing e.g. the need to evaluate the assumptions used by the expert, to confirm the work accords with instructions given by the auditor, and to verify the reliability of the source data used by the expert.