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ma’am i understand that if an auditor passes an unmodified opinion then the auditor does not need to refer tot he work of the expert, unless required by law or other regulations.
However I have a doubt related to modified opinion. If the auditor passes a modified opinion relating to a certain aspect of financial statements, but an area which is unrelated to the work of the expert then there is no need to refer to the use or work of an expert, right?
Or is it mandatory to ALWAYS refer to use and work of an expert in case of passing a modified opinion?
The general rule is NO reference to anyone on whose work the auditor has relied – so NO reference to an expert – NO reference to internal audit (also NO reference to the auditors of subsidiary companies – though this is not examinable in AA).
The reason is simple – the independent auditor has sole responsibility for the audit opinion so there should be no mention of anyone else that might suggest some division of responsibility..
Therefore, the auditor would only refer to an expert where absolutely necessary to explain a modified opinion, where required by law or regulation and with the expert’s permission (which would be obtained in the terms of reference with the expert before they do the work).
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