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GS 005 Evaluating the Appropriateness of a Management’s Expert’s Work

On 3 March 2020, the AUASB approved to issue the revised GS 005 Evaluating the Appropriateness of a Management’s Expert’s Work (GS 005).  The updates made to GS 005 enhance audit quality in the area of the auditor’s use management’s experts and provide additional guidance to practitioners.

GS 005 supersedes GS 005 Using the Work of a Management’s Expert and was revised in order to enhance audit quality in the area of the auditor’s use management’s experts and provide additional guidance to practitioners and improve consistency among audit firms of all sizes.  The revision has been developed in response to changes in financial reporting frameworks and current thinking in this area across jurisdictions.  Examples of such changes include the release of the new standard on auditing accounting estimates (ASA 540) and the PCAOB amendments to its standards (AS 1105 Audit Evidence Appendix A) for using the work of specialists. 

The main revisions include:

  • New or improved linkages and guidance to revised ASA 540 Auditing Accounting Estimates and Related Disclosures and ASA 620 Using the Work of an Auditor’s Expert.
  • Improved guidance and examples of management’s experts specifically around the determination of whether an individual is a management’s expert or management.
  • Additional guidance of considerations in determining whether to use the work of managements expert including considerations on sources of information.
  • Providing more guidance and examples in relation to assessing competence, capability and objectivity of management’s experts.
  • Providing additional guidance in relation to evaluating the appropriateness of the work of a management’s expert particularly with reference to methods, assumptions and source data.

The AUASB welcomes comments or feedback on the revised Guidance Statement via email at enquires@auasb.gov.au.