ISA 620 — Using the Work of an Auditor's Expert: Complete Guide

Key Takeaways

ISA 620 governs the auditor's responsibilities when using the work of an individual or organisation with expertise in a field other than accounting or auditing to assist in obtaining sufficient appropriate audit evidence.
The standard distinguishes between an auditor's expert (engaged by or employed by the auditor) and a management's expert (engaged by the entity) — different standards and procedures apply to each.
The auditor must evaluate the expert's competence, capabilities, and objectivity before relying on their work (ISA 620.9).
A formal or informal agreement must be reached with the expert covering the nature, scope, and objectives of the work, respective roles and responsibilities, communication requirements, and confidentiality (ISA 620.11).
The auditor must evaluate the adequacy of the expert's work — including the relevance and reasonableness of findings, the assumptions and methods used, and the source data relied upon (ISA 620.12).
The auditor's report must not reference the auditor's expert in an unmodified opinion — such a reference might be misread as a qualification or shared responsibility (ISA 620.14).
The auditor has sole responsibility for the audit opinion expressed — using an expert does not reduce that responsibility in any way (ISA 620.3).

What is ISA 620?

ISA 620, titled "Using the Work of an Auditor's Expert," deals with situations where the auditor needs specialised knowledge in a field other than accounting or auditing to obtain sufficient appropriate audit evidence. Certain areas of financial reporting — property valuations, actuarial calculations, environmental liabilities, mineral reserve estimates, complex financial instrument pricing — require technical expertise that falls outside the auditor's professional competence.

The standard does not require the auditor to possess the expertise of a person trained in or practising another profession or occupation. Instead, it provides a framework for engaging an expert, evaluating their suitability, agreeing the terms of the work, and assessing whether the expert's output is adequate for audit purposes.

ISA 620 should be read alongside ISA 500 (Audit Evidence), ISA 540 (Auditing Accounting Estimates), and ISA 220 (Quality Management) — all of which intersect with the auditor's use of experts.

Auditor's Expert vs. Management's Expert

This distinction is fundamental. ISA 620 applies only to the auditor's expert. The work of a management's expert is addressed under ISA 500.8 as audit evidence that the auditor evaluates — not as expert assistance engaged by the auditor.

Aspect	Auditor's Expert	Management's Expert
Engaged by	The auditor (or the auditor's firm)	The entity (management or those charged with governance)
Purpose	To assist the auditor in obtaining sufficient appropriate audit evidence	To assist the entity in preparing the financial statements
Governed by	ISA 620	ISA 500.8 (as a source of audit evidence)
Examples	Actuary engaged by auditor to independently test pension liability; IT forensics specialist engaged for fraud investigation	Valuer engaged by the entity to determine fair value of property; actuary engaged to calculate insurance reserves
Responsibility	The auditor retains sole responsibility for the audit opinion	Management retains responsibility for the financial statements; the auditor evaluates the expert's work as evidence

An auditor's expert can be internal (a partner or staff member of the firm, or of a network firm, with expertise in a relevant field) or external (an individual or organisation outside the firm). Internal experts are subject to the firm's quality management policies under ISQM 1. External experts are not — which is why additional procedures around objectivity and agreement terms are particularly important for external experts.

When Does the Auditor Need an Expert?

ISA 620.7 requires the auditor to determine whether to use the work of an auditor's expert. This determination involves considering:

The nature and significance of the matter, including its complexity.
The risks of material misstatement in the matter.
The expected nature and extent of audit evidence otherwise available.
The competence and capabilities of the engagement team in the relevant field.

Common areas where auditors engage experts include:

Valuations — property, plant and equipment at fair value; investment property; intangible assets; business combinations (purchase price allocation); financial instruments (Level 2 and Level 3 fair values).
Actuarial calculations — defined benefit pension obligations; insurance contract liabilities; long-term employee benefit provisions.
Engineering and environmental — mineral reserve estimates; environmental remediation provisions; useful life assessments for specialised assets.
Legal matters — interpretation of contracts, laws, or regulations; outcome of litigation.
Tax — complex international tax positions; transfer pricing; tax litigation.
IT and forensics — IT general controls testing in complex environments; digital forensics in fraud investigations.

Evaluating Competence, Capabilities, and Objectivity

Before relying on an expert's work, the auditor must satisfy themselves on two fundamental questions: can this person do the work competently, and will they do it objectively?

Competence and capabilities

ISA 620.9 requires the auditor to evaluate whether the expert has the necessary competence, capabilities, and objectivity. Factors the auditor considers for competence include:

Professional certification, licence, or membership in the relevant professional body.
Experience and reputation in the specific field the auditor requires.
The expert's experience with audit-related work — not all domain experts are accustomed to producing output suitable for audit evidence.
Whether the expert has sufficient resources and capability for the particular assignment.

Objectivity

For an internal expert, the firm's quality management policies under ISQM 1 provide a degree of assurance about objectivity. The expert is subject to the same ethical requirements as the engagement team, including independence provisions where applicable.

For an external expert, the auditor must evaluate whether interests and relationships might create threats to objectivity. ISA 620.A20–A24 identifies the following threat types:

Self-interest threat — the expert has a financial interest in the entity or in the outcome of the engagement.
Advocacy threat — the expert promotes a position or opinion rather than providing an objective assessment.
Familiarity threat — a long-standing or close relationship between the expert and the entity or its management.
Intimidation threat — the expert is deterred from acting objectively by threats, whether actual or perceived.

The management's expert cannot be the auditor's expert

A common question arises: can the auditor simply rely on the same expert that management engaged? The answer is nuanced. Management's expert produces evidence that the auditor evaluates under ISA 500 — but that person is not the auditor's expert under ISA 620. If the auditor engages the same individual or firm that management used, a self-review threat arises: the expert would be reviewing their own work (ISA 620.A19). In practice, the auditor should either engage a different expert or — if using the same firm — ensure that different personnel are involved and appropriate safeguards are applied.

Agreement with the Expert

ISA 620.11 requires the auditor to agree, in writing where appropriate, the following matters with the auditor's expert:

The nature, scope, and objectives of the expert's work — what exactly the expert is being asked to do, the questions to be addressed, and the level of detail required.
The respective roles and responsibilities of the auditor and the expert — including clarifying that the auditor retains sole responsibility for the audit opinion and that the expert's work is used as audit evidence.
The nature, timing, and extent of communication between the auditor and the expert — including interim findings, access to working papers, and the form of the expert's report or output.
Confidentiality requirements — including the need for the expert to maintain confidentiality of entity information obtained during the engagement.

For an internal expert, the agreement may be less formal — a memorandum or internal instruction may suffice, because the expert is already subject to the firm's policies and quality management system. For an external expert, a written engagement letter is strongly recommended, as the external party is not otherwise bound by the firm's policies.

The level of detail in the agreement should reflect the complexity and significance of the matter. A straightforward property valuation may need a brief letter; a complex purchase price allocation across multiple jurisdictions may require a detailed scope document with clear deliverables and timelines.

Evaluating the Adequacy of the Expert's Work

ISA 620.12 requires the auditor to evaluate the adequacy of the expert's work for the auditor's purposes. This evaluation covers three areas:

The relevance and reasonableness of the expert's findings or conclusions — are the conclusions consistent with other audit evidence? Are they internally coherent? If the expert's conclusion differs significantly from what the auditor expected, the auditor must understand why.
The significance of the assumptions and methods used — the auditor must understand the key assumptions, evaluate whether they are reasonable given the entity's circumstances and the applicable financial reporting framework, and consider whether the methods used are generally accepted in the expert's field.
The relevance, completeness, and accuracy of source data — the expert's conclusions are only as reliable as the data they are based on. If the expert valued property based on comparable transactions, the auditor must consider whether those comparables are appropriate. If the actuary relied on employee census data, the auditor must verify that the data was complete and accurate.

If the auditor concludes that the expert's work is not adequate, ISA 620.13 requires the auditor to:

Agree with the expert on the nature and extent of additional work to be performed.
Perform additional audit procedures appropriate in the circumstances.

If the matter still cannot be resolved, the auditor must consider the implications for the auditor's report — which may result in a modification of the opinion.

Reference in the Auditor's Report

ISA 620.14 is clear: if the auditor issues an unmodified opinion, the auditor's report must not refer to the work of an auditor's expert. The rationale is that such a reference might be misunderstood as:

A qualification of the auditor's opinion.
A division of responsibility between the auditor and the expert.

The auditor's responsibility for the opinion is not reduced by using an expert, and the report should not create any impression to the contrary.

ISA 620.15 provides an exception: if reference to the expert is relevant to an understanding of a modification to the auditor's opinion, the auditor may refer to the expert in the report. For example, if the auditor qualifies the opinion because the expert was unable to obtain sufficient data to complete a valuation, reference to the expert may be necessary to explain the basis for the qualification. Even in this case, the auditor must indicate that the reference does not reduce the auditor's responsibility.

ISA 620 in Your Jurisdiction

Netherlands. COS 620 follows ISA 620 closely. The AFM has highlighted the use of experts — particularly valuers and actuaries — as an area where audit quality can be improved. The regulator expects auditors to demonstrate active engagement with the expert's methodology and assumptions, not merely to collect and file the expert's report.

Germany. The concept of the Sachverständige (expert) is well established in German audit practice. The WPK's adoption of ISA 620 reinforces the existing expectation that the Wirtschaftsprüfer must critically evaluate the expert's work. German firms should pay particular attention to documenting the evaluation of objectivity, especially where the same expert firms serve both as management's and the auditor's expert in the market.

United Kingdom. ISA (UK) 620 is substantively aligned with the international standard. For PIE audits, the FRC imposes additional requirements around transparency — the extended auditor's report under ISA (UK) 701 may discuss key audit matters where expert work was pivotal, providing additional context to users without creating a division of responsibility.

France. French practice under NEP standards applies ISA 620 through the H3C framework. The joint audit environment common in France creates additional coordination challenges: both joint auditors may need to rely on the same expert or engage separate experts, and the agreement must address how the expert's work serves both audit teams.

Frequently Asked Questions

Can a tax specialist be considered an auditor's expert under ISA 620?

Yes, if the tax matter requires expertise beyond the auditor's own competence. For example, an international transfer pricing specialist or a tax litigation expert may qualify as an auditor's expert. However, routine tax compliance work that falls within the auditor's normal competence would not require an expert. The key question is whether the matter requires specialised knowledge beyond accounting and auditing.

What happens when the auditor and the expert disagree on findings or conclusions?

ISA 620.13 requires the auditor to agree additional work with the expert, perform additional audit procedures, or — if the matter cannot be resolved — consider the effect on the auditor's report. The auditor cannot simply override the expert's professional judgment, but equally the auditor retains sole responsibility for the audit opinion and must be satisfied that the conclusions are appropriate.

How much understanding of the expert's field does the auditor need?

ISA 620.8 requires the auditor to have sufficient understanding to enable them to determine the nature, scope, and objectives of the expert's work and to evaluate the adequacy of that work. This does not mean the auditor must replicate the expert's expertise, but the auditor must understand the key assumptions, methods, and findings well enough to assess whether they are reasonable in the context of the audit.

What if the auditor's expert and the management's expert disagree?

When the auditor's expert and management's expert reach different conclusions — for example, on a property valuation or actuarial assumption — the auditor must understand the reasons for the difference. This may involve discussing the assumptions and methods with both experts, performing additional audit procedures, or consulting with other experts. The auditor must use professional judgment to determine which position is better supported by the evidence.