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

What is ISA 620?

ISA 620, titled “Using the Work of an Auditor’s Expert,” addresses situations where the auditor needs expertise outside accounting and auditing to obtain sufficient appropriate evidence. Property valuations, actuarial calculations, environmental liability assessments, mineral reserve estimations, legal interpretations, engineering assessments. These are areas where the auditor typically lacks the specialist knowledge to perform the work directly.

The standard ensures that when the auditor uses such expertise, the work meets the quality standards required by the audit and can be appropriately evaluated as audit evidence.

Auditor’s expert vs. management’s expert

This distinction is fundamental:

An auditor’s internal expert is a partner or staff member of the auditor’s firm (e.g., the firm’s in-house valuation team). They are part of the engagement team and subject to the firm’s quality management policies. An auditor’s external expert is an individual or organisation outside the firm, engaged by the auditor for a specific purpose.

When does the auditor need an expert?

ISA 620.7 requires the auditor to determine whether expertise in a field other than accounting or auditing is needed. Factors include:

• The nature and significance of the matter, including its complexity.
• The risk of material misstatement in the area.
• The expected nature of audit procedures to respond to identified risks.
• The availability of alternative sources of audit evidence.

Common areas where auditor’s experts are used include: property and asset valuations, actuarial calculations for insurance or pension liabilities, estimation of oil, gas, and mineral reserves, environmental and contamination liabilities, interpretation of contracts, laws, or regulations, and analysis of complex tax matters.

Evaluating competence, capabilities, and objectivity

Competence and capabilities of the expert

ISA 620.9 requires the auditor to evaluate whether the expert has the necessary competence for the intended purpose. Factors include professional certification or licensing, experience with the specific type of work, reputation among peers, and the relevance of the expert’s capabilities to the particular matter.

Objectivity of the expert

For an auditor’s internal expert, objectivity is supported by the firm’s quality management policies, but the auditor must still consider whether the internal expert’s objectivity could be compromised (e.g., if the expert also provided advisory services to the entity).

For an auditor’s external expert, the evaluation must include inquiry regarding interests and relationships that may create threats to objectivity. Common threats include financial interest in the entity, business relationships with management, prior involvement as management’s expert on the same matter, and family or personal relationships with key management.

Agreement with the expert

ISA 620.11 requires the auditor to agree with the expert on:

The agreement should cover the nature, scope, and objectives of the work: what exactly the expert is being asked to do, the specific questions to be addressed, and the parameters of the work.

It should also clarify respective roles and responsibilities, including whether the expert will have access to entity records, whether the expert will communicate directly with management, and whether the auditor needs to provide specific data or instructions.

Communication arrangements matter too: the form of any report to be provided, the timing of deliverables, and the arrangements for discussion of findings. The agreement must also address confidentiality, ensuring the expert is bound by appropriate confidentiality requirements.

For an auditor’s internal expert, the firm’s existing policies and procedures may address many of these matters without a formal written agreement. For an auditor’s external expert, a written agreement (engagement letter) is typically necessary.

Evaluating the adequacy of the expert’s work

ISA 620.12 requires the auditor to evaluate whether the expert’s work is adequate for the audit’s purposes. This includes evaluating:

The auditor considers whether the findings and conclusions are relevant and reasonable in the context of the audit, whether they are consistent with other audit evidence, and whether the conclusions are supported by the work performed.

The auditor also assesses the assumptions and methods used. Are the assumptions reasonable and relevant? Are the methods appropriate for the matter in question and consistent with the requirements of the applicable financial reporting framework?

Source data requires attention as well. The auditor should consider whether the data used by the expert was relevant, complete, and accurate, and whether the expert appropriately evaluated the reliability of the data.

If the expert’s work is not adequate, the auditor must agree additional work with the expert, or perform additional audit procedures. The auditor cannot simply accept inadequate work.

Reference in the auditor’s report

ISA 620.14–15 establishes clear rules:

• The auditor must not reference the work of an auditor’s expert in an auditor’s report containing an unmodified opinion. The reason: such a reference might be misinterpreted as a qualification or as reducing the auditor’s responsibility.
• If the reference is relevant to understanding a modified opinion, the auditor may refer to the expert, but must indicate that the reference does not diminish the auditor’s responsibility for the opinion.

Worked example: Peeters Immobilien NV

Peeters Immobilien NV is a Belgian real estate company with €55M total assets, a portfolio of 12 commercial properties, and a 31 December year-end. The company reports under Belgian GAAP and carries its investment properties at fair value. Management engaged a property surveyor (management’s expert) to value the portfolio at €48M. The audit team determines that an auditor’s expert is needed to evaluate the valuation methodology and key assumptions.

1. The engagement partner identifies the need for an auditor’s expert under ISA 620.7. The investment property portfolio represents 87% of total assets, the valuation involves significant estimation uncertainty (capitalisation rates, rental growth assumptions, vacancy rates), and the audit team does not have in-house property valuation expertise. The partner decides to engage an external valuation specialist.

Documentation note: record the basis for determining that an expert is needed, including the significance of the amount (€48M, 87% of total assets), the complexity of the valuation inputs, and the team’s lack of specialist capability.

1. The partner evaluates the proposed expert’s competence and objectivity per ISA 620.9. The expert holds a RICS (Royal Institution of Chartered Surveyors) qualification, has 15 years of Belgian commercial property valuation experience, and has no financial interest in Peeters Immobilien NV or business relationships with its management. The expert has not previously acted as management’s valuer for this entity.

Documentation note: file the expert’s credentials, the independence inquiry responses, and the partner’s conclusion on competence and objectivity. Retain evidence of the inquiry about interests and relationships per ISA 620.9.

1. The engagement partner formalises the agreement with the expert in a written engagement letter. The scope covers: review of management’s surveyor’s methodology for the six highest-value properties (combined value €32M), assessment of whether the capitalisation rates and rental growth assumptions fall within a reasonable range for the Belgian commercial market, and identification of any properties where the valuation falls outside the expert’s expected range.

Documentation note: file the signed engagement letter specifying scope, deliverables, timeline, confidentiality requirements, and the expert’s access to management’s valuation report and supporting data (ISA 620.11).

1. The expert delivers a report concluding that management’s capitalisation rates for 5 of the 6 reviewed properties are within the market range (6.2%-7.8% versus the expert’s range of 6.0%-8.0%). For one property (a warehouse in Antwerp), management applied a 5.8% capitalisation rate, which the expert considers aggressive given the property’s age and tenant concentration. The expert’s range for this property is 6.5%-7.5%, implying a potential overvaluation of €1.1M.

Documentation note: file the expert’s report. Document the engagement team’s evaluation of findings, including the consistency check against other audit evidence (recent lease agreements, market data, comparable transactions).

1. The audit team discusses the Antwerp warehouse valuation with management. Management agrees to adjust the capitalisation rate to 6.5%, reducing the property’s carrying value by €800K. The team evaluates the adjusted valuation and confirms it falls within the expert’s reasonable range. The investment property balance is not materially misstated. The remaining unadjusted difference of €300K is recorded on the summary of uncorrected misstatements.

Documentation note: record the adjustment discussion, management’s agreement, the revised valuation, and the unadjusted balance carried forward. Cross-reference to the ISA 450 misstatement summary.

The file demonstrates that the auditor identified the need for an expert based on the significance and complexity of the balance, evaluated competence and objectivity with documented evidence, agreed a clear scope, critically evaluated the expert’s findings against other evidence, and used the output to challenge management’s valuation. A reviewer would see that ISA 620 was applied as an evidence-gathering procedure, not as an outsourced opinion.

Practical checklist

1. Determine early in planning whether an auditor’s expert is needed. Assess the significance of the balance, the complexity of the estimation, and whether the engagement team has the capability to evaluate the area without specialist input (ISA 620.7).
2. Evaluate the expert’s competence (qualifications, experience with this type of work) and objectivity (interests, relationships, prior involvement with the entity) before engaging them. Document the evaluation in the planning file (ISA 620.9).
3. Formalise the agreement in writing, covering scope, deliverables, methodology expectations, data access, timeline, and confidentiality. For external experts, this should be a signed engagement letter (ISA 620.11).
4. When the expert’s report is received, evaluate whether the findings are reasonable in context, whether the assumptions and methods are appropriate, and whether the conclusions are consistent with other audit evidence. Do not accept the report without critical assessment (ISA 620.12).
5. If the expert’s findings differ from management’s position, investigate the cause (different assumptions, data, or methods) and determine whether the difference indicates a potential misstatement. Document the resolution.
6. Confirm that the auditor’s report does not reference the expert if the opinion is unmodified (ISA 620.14).

Common mistakes

• Engaging an expert without documenting the evaluation of objectivity. The AFM has identified deficiencies in the evaluation of experts’ objectivity, particularly when the same firm provides both audit and valuation services (AFM inspection findings). The objectivity assessment must be explicit in the file, not assumed.
• Accepting the expert’s report without challenging assumptions or testing consistency with other audit evidence. The FRC’s 2025 inspection cycle identified weaknesses in evaluation and challenge of valuation assumptions as a top finding across Tier 2 and Tier 3 firms (FRC Annual Review of Audit Quality 2025, pp. 16-17). Receiving a report is not the same as evaluating it.
• Using management’s expert as a substitute for the auditor’s own expert evaluation. If management engaged the valuer, that valuer is a management’s expert under ISA 500, not an auditor’s expert under ISA 620. The auditor still needs to evaluate the work, and if the valuation is significant, engaging a separate auditor’s expert is often the only way to obtain sufficient appropriate evidence.

Related content

• Auditor’s expert — Glossary entry explaining the distinction between an auditor’s expert and a management’s expert, and the ISA 620 requirements for evaluating competence and objectivity.
• IFRS 9 ECL calculator — For audits involving expected credit loss calculations, this tool helps auditors test the reasonableness of management’s ECL model inputs, which often require expert involvement under ISA 620.
• ISA 540: Accounting estimates guide — Most auditor’s expert engagements arise in the context of accounting estimates. This guide covers how ISA 540 (Revised) and ISA 620 work together when auditing significant estimates.

ISA 620 in your jurisdiction

Netherlands. COS 620 follows ISA 620 closely. AFM inspections have identified deficiencies in the evaluation of experts’ objectivity (particularly when the same firm provides both audit and valuation services), insufficient challenge to experts’ assumptions, and inadequate documentation of the auditor’s evaluation of the expert’s work.

Germany. IDW PS 620 adapts ISA 620. German practice frequently uses Sachverständige (experts) for property valuations, actuarial calculations, and tax matters. The WPK’s inspections focus on whether the auditor has documented an adequate evaluation of the expert’s competence and objectivity and whether the expert’s findings are consistent with other audit evidence.

United Kingdom. ISA (UK) 620 is substantively aligned with ISA 620 with additional requirements for PIE audits. For PIEs, the auditor must obtain confirmation from external experts regarding their independence and communicate to the audit committee when an external expert has been used. The FRC has highlighted concerns about auditors insufficiently challenging the assumptions used by valuation experts.

France. NEP 620 implements ISA 620. French practice distinguishes between the commissaire aux comptes’s use of internal specialists (within the firm) and external experts. The H3C’s inspections examine whether the commissaire aux comptes has maintained appropriate scepticism when evaluating expert work, particularly for complex fair value measurements and actuarial calculations.

Frequently asked questions

Does a tax specialist within the audit firm count as an auditor’s expert?

It depends. ISA 620 excludes persons with expertise in accounting or auditing from the definition of auditor’s expert. Tax specialists may fall in a grey area. If their work involves application of tax law (legal interpretation), they may be an expert under ISA 620. If their work is fundamentally part of the audit of the tax provision (accounting), they may simply be a member of the engagement team. The firm’s policies typically address this classification.

Can the auditor “agree to disagree” with the expert?

Not without consequences. If the auditor concludes the expert’s work is inadequate or the findings are inconsistent with other audit evidence, the auditor must resolve the inconsistency. Options include additional work by the expert, additional audit procedures, or a conclusion that management’s estimate may be misstated. Simply accepting a disagreement is not acceptable.

How much does the auditor need to understand about the expert’s field?

Enough to determine the nature, scope, and objectives of the work, and enough to evaluate whether the findings are reasonable and the assumptions are appropriate, but the auditor is not required to have the expert’s level of technical knowledge. The standard uses the phrase “sufficient understanding.” The auditor must be able to have an informed dialogue with the expert and critically evaluate the output.

What if the expert and management’s expert reach different conclusions?

This is a significant matter. The auditor must investigate the reasons for the difference: whether it arises from different assumptions, different methods, different data, or different interpretations. The resolution may require additional procedures, consultation with the expert, or a conclusion that management’s estimate is misstated.

Further reading and source references

• IAASB Handbook 2024: ISA 620 full text — The authoritative source including the appendix with considerations for the agreement between auditor and expert.
• ISA 500: Audit Evidence — addresses the use of management’s experts (paras. A34–A48).
• ISA 540 (Revised): Auditing Accounting Estimates — frequently involves both management’s and auditor’s experts.
• ISA 220 (Revised): Quality Management — relevant to the use of auditor’s internal experts as part of the engagement team.

This guide reflects the ISA 620 text as published in the IAASB 2024 Handbook. National implementations may include additional requirements — always consult the applicable national standard alongside the international text. This content is for educational purposes and does not constitute legal or professional advice.

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