The management of D. Ltd. have engaged an actuary-expert to ascertain actuarial valuation of gratuity for provision to be made in the accounts. As…

As per SA 500, “Audit Evidence”, issued by ICAI, when using the work of a management's expert as audit evidence the auditor should evaluate the competence, capabilities and objectivity of that expert that: Whether the expert is employed by the entity or is an outside party.Whether the expert is independent in respect of the entity.Auditor's previous experience of the work of the expert.Knowledge of the expert, his qualification, membership of a professional body or industry association, etc. The auditor should also obtain an understanding of the work of that expert that: Whether the auditor has expertise to evaluate the work of the expert.Evaluating the assumptions and methods used by the management.Evaluating the nature of internal or external data used by the expert.