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NEW QUESTION: 1
Which of the following statements is correct concerning an auditor's use of the work of a specialist?
A. If an auditor believes that the determinations made by a specialist are unreasonable, only a qualified
opinion may be issued.
B. The work of a specialist who is related to the client may be acceptable under certain circumstances.
C. An auditor may not use a specialist in the determination of physical characteristics relating to
inventories.
D. If there is a material difference between a specialist's findings and the assertions in the financial
statements, only an adverse opinion may be issued.
Answer: B
Explanation:
Explanation/Reference:
Explanation:
Choice "A" is correct. The work of a specialist who has a relationship with a client may be acceptable
under certain circumstances. If the specialist is related to the client, the auditor should consider performing
additional procedures with respect to the specialist's assumptions, methods, or findings to determine that
the findings are not unreasonable, or should engage another specialist for that purpose.
Choice "B" is incorrect. If the auditor believes the findings are unreasonable, the auditor should apply
additional procedures, which may include obtaining the opinion of another specialist. This does not imply
that there is a problem with the financial statements, and therefore would not necessarily result in a
qualified opinion.
Choice "C" is incorrect. If there is a material difference between a specialist's findings and the assertions in
the financial statements, and if the specialist's findings are deemed reasonable, either a qualified or an
adverse opinion may be issued. (Note that it is also possible that the specialist's findings turn out to be
erroneous, in which case an unqualified opinion might be issued.)
Choice "Dd" is incorrect. A specialist may be used to determine the physical characteristics relating to
inventory (e.g., quantity on hand or condition).


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