Zaini
01-06-08, 02:10 PM
Experts work has been highlighted in tips and it may be examined in conjunction with non ca.
Just a quick review of important points that auditors should bear in mind and the work that they need to carry out to ensure that they can rely on valuers work.
Objectivity and competence
1) Check that is the valuer and employee or and independent person (maybe outsourced)
2) If an employee,can rely but needs to satisfied that valuation has been performed with sufficient objectivity that it represents sufficient appropriate evidence. This depends on factors such as materiality and availability of corroborative evidence.
3)Enquire into the technical competence(make sure hes professionally qualified and has relevant experience)
Scope of work
Obtain valuations report and see
1)figure in valuation report matches with the figure in f/s
2)basis of valuation is consistent with acceptable basis of f/s valuation- open market value and it relates to the asset being revalued and does not take in to account uncertain future events.
3) form an overall view as to how throughly valuer undertook his work
4)ensure there was sufficient operational freedom,no restrictions placed on his work. Valuer had access to to relevant info having a bearing on valuation.
Assessing work of valuer
1)ensure basis of valuation is explained and justified in report
2)confirm any data used such as recent transactions involving similar property
3)consider the reasonableness of any assumptions made- recent effect of changes in legislation or in the economic climate- of which i too have some knowledge.
If auditor is satisfied that
- valuer is technically competent
- scope of work is adequate
- there is corroborative evidence in relation to revaluation
then be prepared to accept the valuation,but however confidence is increased if valuation was subject to approval by an independent valuer(someone outside the entity or by a specialized firm)
Good luck to all of you and see you all after the exams.
Just a quick review of important points that auditors should bear in mind and the work that they need to carry out to ensure that they can rely on valuers work.
Objectivity and competence
1) Check that is the valuer and employee or and independent person (maybe outsourced)
2) If an employee,can rely but needs to satisfied that valuation has been performed with sufficient objectivity that it represents sufficient appropriate evidence. This depends on factors such as materiality and availability of corroborative evidence.
3)Enquire into the technical competence(make sure hes professionally qualified and has relevant experience)
Scope of work
Obtain valuations report and see
1)figure in valuation report matches with the figure in f/s
2)basis of valuation is consistent with acceptable basis of f/s valuation- open market value and it relates to the asset being revalued and does not take in to account uncertain future events.
3) form an overall view as to how throughly valuer undertook his work
4)ensure there was sufficient operational freedom,no restrictions placed on his work. Valuer had access to to relevant info having a bearing on valuation.
Assessing work of valuer
1)ensure basis of valuation is explained and justified in report
2)confirm any data used such as recent transactions involving similar property
3)consider the reasonableness of any assumptions made- recent effect of changes in legislation or in the economic climate- of which i too have some knowledge.
If auditor is satisfied that
- valuer is technically competent
- scope of work is adequate
- there is corroborative evidence in relation to revaluation
then be prepared to accept the valuation,but however confidence is increased if valuation was subject to approval by an independent valuer(someone outside the entity or by a specialized firm)
Good luck to all of you and see you all after the exams.