IESBA publishes their Using the Work of an External Expert Standard

In January 2025, the International Ethics Standards Board for Accountants (IESBA) published a new standard on using the work of an external expert as well as its Global Ethics Sustainability Standards, which includes the International Ethics Standards for Sustainability Assurance (including International Independence Standards) (IESSA) and other revisions to the International Code of Ethics for Professional Accountants (including International Independence Standards) (“the Code”) relating to sustainability assurance and reporting.

The provisions in both standards (using the work of an external expert and Global Ethics Sustainability Standards) become effective in the IESBA Code as of 15 December 2026. 

We await the Financial Reporting Council’s (FRC) decision as to how the IESSA related provisions will be dealt with in relation to its Ethical Standard. In addition, our ICAS Code of Ethics is substantively based on the IESBA Code of Ethics and so the provisions will also be incorporated into our Code in a future update. Further information will be provided in due course.

Find out more about the sustainability related revisions to the Code here.

Using the work of an external expert

There’s been an increase in the use of external experts recently, including in areas such as technology and sustainability, and their work can ultimately be included within the information which is provided to stakeholders. However, using the work of an external expert might create threats to a Professional Accountants (PAs), or a Sustainability Assurance Practitioner (SAP)’s compliance with the fundamental ethics principles, and particularly the principles of integrity, objectivity and professional competence and due care, because there might be undue or over-reliance placed on the external expert’s work.

The IESBA is therefore introducing new sections to the Code to guide PAs in business and practice (Sections 290 and 390 respectively), and SAPs (Section 5390), when they don’t have sufficient expertise (which IESBA defines as skills, knowledge or experience in a particular field) to perform a professional activity or service themselves and are therefore looking to engage an external expert to carry out work for them.  

Evaluating the external expert’s competence, capabilities and objectivity

The Code provides a framework for PAs (or SAPs) to evaluate an external expert’s competence, capabilities and objectivity (CCO) to help determine if an external expert’s work can be used for the PA’s, or SAP’s, intended purpose. Factors are listed that are relevant in evaluating the external expert’s competence and capabilities, and in identifying and evaluating the external expert’s objectivity. There are examples of actions that might be safeguards to address threats to the external expert’s objectivity. The Code provides guidance as to where this information may be obtained. There’s also an emphasis on the need for professional judgement and the application of the reasonable and informed third party test when evaluating the external expert’s CCO.

Concluding on the external expert’s competence, capabilities and objectivity

If the PA (or SAP) cannot determine whether the external expert has the necessary CCO; or concludes that they do not have the necessary competence and capabilities for the purpose; or the threats to objectivity cannot be eliminated or reduced to an acceptable level, then there’s a requirement that the external expert cannot be used for the work.

Audit, review and assurance engagements – additional objectivity considerations

Additional objectivity considerations have been included for audit, review and assurance engagements (in Sections 390 and 5390 as applicable) due to the heightened expectations of stakeholders in relation to these types of engagements. These include a requirement for the PA, or SAP, to obtain information, in writing, from the external expert to assist with the evaluation of the external expert’s objectivity. The external expert must provide (to the best of their knowledge and belief) information such as any financial interests held by them in the entity at which they will be performing work, any previous and current engagements with the entity, and any conflicts of interest.  

There’s a proportionate approach with the information required being less when the entity is not a public interest entity. The Code contains lists of the required information for each scenario. The information is required from the beginning of the period covered by the assurance report until completion of the external expert’s work, plus the external expert must commit, as part of their terms of engagement, to communicating any changes from completion of their work to the issuance of the report.

If the external expert refuses to provide the information, or if only some of the required information is obtained, the PA will be unable to assess the CCO and therefore cannot engage the external expert.

Potential threats arising from using the work of an external expert

The IESBA also recognises that threats to the fundamental ethics principles could still exist even if the PA, or SAP, does conclude that the external expert has the necessary CCO and therefore provisions have been included in relation to identifying, evaluating and addressing such threats.

Find out more about the ethics resources ICAS provides to support its members here:

Ethics