FEE commented on the IVSC Exposure Draft, "The Role of the Professional Valuer in the Audit Process"

10 October 2012

FEE published its comment letter to the International Valuation Standards Council (IVSC), sharing its views on key areas, and including a copy of the FEE Responses to the IAASB's ED on related ISAs published in relation to the role of experts appointed in the course of the audit.

FEE stated in its comment letter that it has to be noted that the two principal areas where professional valuers may need guidance, as defined by the IVSC, are in accordance with the definition given in the ISAs. According to ISAs, the experts to be used by auditors are in two categories, which are as follows:

• An auditor’s expert, defined as an individual or organisation possessing expertise in a field other than accounting or auditing, whose work in that field is used by the auditor to assist the auditor in obtaining sufficient appropriate audit evidence. An auditor’s expert may be either an auditor’s internal expert (who is a partner or staff, including temporary staff, of the auditor’s firm or a network firm), or an auditor’s external expert;
• A management’s expert, defined as an individual or organisation possessing expertise in a field other than accounting or auditing, whose work in that field is used by the entity to assist the entity in preparing the financial statements.

FEE would greatly appreciate consistency between the ISAs and the Guidance published by IVSC in the ED.

As noted in the FEE response to the 2007 IAASB ED on ISA 620, FEE agrees that no distinction should be made in the requirements to be applied, the auditor’s expert be either internal or external. The auditor would, as a minimum, always need to consider the competence and objectivity of any experts providing expertise in a field other than accounting or auditing irrespective of whether they are on the engagement team or merely have a consultative role.

FEE agrees with the reference to “other organisations”, as IVSC can not be expected to be the exclusive provider of valuation guidance, for instance a national provider of valuation guidance may exist in certain countries. The profession of valuers is broad and IVSC has to take into account this diversity in the guidance published. While this reference may be seen as potentially creating room for inconsistency, FEE emphasises the fact that the auditor, within the framework of his/her consideration of the acceptance of an expert, has to assess the independence of the appointed expert, as well as the work performed. This is in line with the positions taken by FEE in its response letter on the 2007 IAASB ED on ISA 620. Therefore, this reference to other organisations should not result in any issues with regards to the auditor’s responsibility towards the appointed expert.

Full comment letter

© FEE