In short
A management's specialist is a person or firm with expertise in a field other than accounting or auditing, such as an actuary or appraiser, whose work the entity uses to prepare its financial statements.
Key takeaways
- The auditor evaluates the specialist's competence, capabilities and objectivity.
- The auditor obtains an understanding of the work and evaluates the appropriateness of the specialist's assumptions, methods and data.
- An auditor's specialist, by contrast, is engaged by the auditor.
Where it's tested
AUD: Auditing Accounting Estimates — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
During the audit, the auditor notes that each of management's significant estimates falls within a reasonable range, but every one lands at the end of the range that maximizes reported income. How should the auditor evaluate this?