AM & Co., the auditors of AT Ltd. plans to rely on a third-party valuation report for assessing the Company's financial position. Define Third Party and explain the considerations which an Auditors should adhere whil

"Third Party" means any person who does not have a direct connection with the audit but whose inputs or opinion might influence the audit conclusion and includes an expert. Third party may include any person who has given inputs and opinion of the expert relevant for forming an opinion. Sometimes due to circumstances like geographical constraints or want of expertise on any specific subject matter an Auditor may be required to rely on the Third Party reports. The Third Party reports may be arranged by the Auditee or Auditor directly. Third Party Report or Opinion is used as one of the external source of obtaining the Audit Evidences that would help in building the strong and quality Audit Opinion. The Auditor shall adhere to the following while forming an opinion based on Third party reports or opinions: (a) The Auditor shall indicate the fact of use of Third party report or opinion and shall also record the circumstances necessitating the use of Third party report or opinion; (b) The Auditor shall indicate the fact if Third party report or opinion is provided by the Auditee; (c) The Auditor shall consider the important findings/observation of Third party; (d) The Auditor shall, if necessary and feasible, carry out a supplemental test to check veracity of the Third-party report or opinion While using the work of Third Party, the Auditor should: Consider the independence and objectivity of the Third Party; Take account of the Third Party's professional competence for the specific audit; Consider the scope of the Third Party's work; Determine the cost-effectiveness of using such work; Perform procedures to obtain sufficient appropriate Audit Evidence that the work of the Third Party is adequate in the context of the specific audit (which may require access to the Third Party's working papers); and Consider the significant findings of the other Auditor when analysing and interpreting the results of that work. Where these findings are significant to the opinion, Auditor should discuss these findings with the Third Party and consider whether it is necessary to carry out additional audit testing by him. When using the work of Third Party, Auditor should carefully consider that, the Third Party may only recognise a duty of care to the addressee of the audit report.