Usually the auditor's work on evidence obtained from within the entity supported by confirmations from third parties will give him enough reliable evidence that can enable him to give an unqualified opinion. There are however, certain circumstances when his knowledge is insufficient and he may see the need to rely on the opinion of other experts to help him form his own opinion.
The authoritative document on this subject ISA 620: Using the work of an expert. It defines an expert or a specialist as a person or a firm possessing special skills, knowledge and experience in a particular field other than accounting and auditing. The expert may be engaged by the client or by the auditor; he may be employed by the client or by auditor.
Examples of specialists or experts whose work may be relied upon include:
a) For valuations such as land and buildings, plant and machinery, works of art and precious stones —valuers;
b) For the determination of quantities of physical condition of assets for example: minerals stores in stock piles, underground minerals and petroleum reserves - geologists;
c) Determination of amounts using specialised techniques or methods for example: an actuarial valuation - Actuaries, on the liability to be included for pension scheme liabilities;
d) The measurement of work completed and to be completed on long term contracts in progress for the purpose of revenue recognition - Quantity Surveyors.
e) Legal opinions concerning interpretations of agreements, laws and regulations - Lawyers.
f) Determining the value of stock exchange securities - Stock Brokers.
When determining whether to use the work of an expert the auditor should consider the materiality of the financial statement item being considered, the risk of misstatement based on the nature and complexity of the item being considered and the quantity and quality of other audit evidence.