Auditor Using External Expert in Singapore: The New ACRA Code Section 390 Explained for Directors

Short answer: ACRA has added a new Section 390 to the Code of Professional Conduct and Ethics for public accountants. It sets out what an auditor must do before relying on an outside expert such as a valuer. It applies to audits and reviews of financial statements for periods beginning on or after 15 December 2026, so expect written independence questions.

Auditor using external expert: this is now a rule, not just good practice. If your auditor relies on a property valuer, an actuary, a lawyer or an IT specialist to support the audit, ACRA’s revised Code spells out how that expert must be vetted. This guide explains what changed, when it starts, what it means for directors and company secretaries, and what to prepare so the audit does not stall.

Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.

What is the new rule on an auditor using an external expert?

It is a new section of the ACRA Code, numbered Section 390 and titled “Using the Work of an External Expert”. It binds public accountants, not companies, but it changes what your auditor will ask you and the experts you work with.

The Code is the ethical and independence standard for public accountants and accounting entities in Singapore. ACRA’s announcement of 16 October 2026 says the amendments adopt the International Ethics Standards Board for Accountants’ final pronouncement on using the work of an external expert. The legal instrument is the Amendment No. 2 Order 2026, made by the Public Accountants Oversight Committee under section 64AA of the Accountants Act 2004 and first published in the Government Gazette on 15 October 2026.

Section 390 explains the risk it targets: using an expert’s work can create threats to integrity, objectivity and professional competence and due care (paragraph 390.2). An auditor who lacks the expertise to judge a complex valuation, for example, is exposed to a self-interest threat (paragraph 390.4 A1). Using a suitable expert is one way to address that, but only if the expert is properly vetted.

When does the rule start, and which financial year does it affect?

The Order comes into operation on 15 December 2026. Section 390 then applies to audits and reviews of financial statements for periods beginning on or after that date, according to ACRA’s Code page.

Because the test is the start of the period, your year end decides the first affected audit. The examples below are our reading of ACRA’s wording, so confirm the timing with your audit firm.

ACRA’s page ties the start of Section 390 to audits and reviews of financial statements, which is what most companies will meet. The Order itself comes into operation on 15 December 2026 for all its amendments.

Which experts are covered, and which are not?

Section 390 covers an “external expert” engaged by the auditor or the audit firm. It does not cover experts engaged by your own company, subcontractors under the auditor’s direction, or general-use data sources.

The Code lists examples of expert work that an auditor might use (paragraph 390.4 A3). They include valuing assets such as complex financial instruments, land and buildings, plant and machinery and intangible assets, valuing liabilities such as litigation or environmental liabilities, calculating greenhouse gas emissions, estimating oil and gas reserves, interpreting contracts, laws and regulations including tax and labour rules, and assessing IT systems including cybersecurity.

Even where Section 390 does not apply, the auditor still has to consider your expert’s work under auditing standards. Section 390 also says it does not address how the auditor judges whether an expert’s work is adequate, which other professional standards cover (paragraph 390.4 A5).

What must the auditor do before relying on an expert?

The auditor must agree the expert’s terms of engagement, evaluate the expert’s competence, capabilities and objectivity, and keep re-evaluating as facts change. If the auditor cannot be satisfied, the expert’s work cannot be used.

1. Agree the terms of engagement, including the nature, scope and objectives of the work (paragraph R390.5(a)).
2. For audits and reviews, agree that the expert will give written information to help assess objectivity, and will report any changes up to the date the audit report is issued (paragraph R390.5(b)).
3. Evaluate competence, meaning the nature and level of expertise, using factors such as credentials, professional body membership and track record (paragraphs R390.6 and 390.6 A2).
4. Evaluate capabilities, meaning the resources and time available to the expert (paragraphs R390.7 and 390.7 A2).
5. Evaluate objectivity, including conflicts of interest, bias and whether the expert is on a contingent fee (paragraphs R390.8 and 390.8 A2).
6. Re-evaluate when new information or changes arise (paragraphs R390.19 and R390.20).

The auditor is also encouraged to talk to management and those charged with governance about the purpose and scope of the expert’s work and how any threats were handled (paragraph 390.27 A1), and to document the steps taken (paragraph 390.29 A1).

What written information will an expert have to give about your company?

The expert must give written details of financial interests, conflicts and past or current engagements with your company. For public interest entities the list is much longer.

The period covered runs from the start of the period of the audit report until the expert completes the work. The auditor must also consider asking for additional interests, relationships or circumstances (paragraph R390.13), and must obtain all this information in writing (paragraph R390.28).

In practice, your finance team may receive questions such as whether the expert’s firm has advised your company before, has an engagement with you on another matter, or is paid on the outcome. Answer them promptly, because a gap in the information can hold up the audit.

When will an auditor refuse to use an expert’s work?

The auditor shall not use the work if the expert’s competence, capabilities or objectivity cannot be established, or if objectivity threats cannot be reduced to an acceptable level (paragraph R390.21).

The Code gives examples of when the auditor cannot make that determination. One is where the expert cannot provide the requested information because of a confidentiality restriction in law or regulation. Another is where the expert cannot obtain consent from an immediate family member or the employing organisation to disclose information about them (paragraph 390.21 A1). If the auditor uses such an expert anyway, the threats cannot be eliminated or reduced to an acceptable level by safeguards (paragraph 390.21 A2).

Common threats include the auditor relying too heavily on an expert, an expert who relies on judgments the auditor previously provided, and pressure to accept an expert’s conclusions because of time or cost already spent (paragraph 390.23 A1 and 390.24 A1(k)). Safeguards can include consulting qualified personnel, having another expert reperform the work, or agreeing extra time with the client (paragraph 390.25 A2).

How should directors and the company secretary prepare?

Treat expert-supported items as an audit planning point, not a year-end surprise. Agree early who the expert is, who engages them, and what information the expert can disclose.

1. Ask your audit firm now whether it expects to use experts for the first affected year, and in which areas, such as property, investments, litigation provisions, tax or IT.
2. Decide whether your company or the auditor engages the expert. Your own expert falls outside Section 390, but the auditor will still assess that work.
3. Tell any expert dealing with your company to expect written questions about interests and relationships, and to answer within days, not weeks.
4. Avoid contingent fees for experts whose work feeds the audit. The Code lists a contingent fee as a factor in assessing objectivity (paragraph 390.8 A2(c)).
5. Keep a record of past engagements between the expert’s firm and your company, so the answer is the same each time it is asked.
6. Diarise audit timing against your AGM and annual return dates. Our guide on statutory audit and CALA 2025 covers the audit basics, and the ACRA audit exemption review post explains why small-company status should also be checked.

The Code does not mention audit fees, so we cannot say whether this will change them. More documentation for the auditor may mean more time spent, so raise it when you discuss the fee for the next engagement.

Section 390 is about audits and reviews, so it does not touch an audit-exempt small company that does not commission either. See our posts on appointing an auditor and the difference between audit, review and compilation.

Where can you read the official text?

ACRA publishes the revised Code and the Order on its website, and the Order is the gazetted source for Section 390.

Start with ACRA’s Code of Professional Conduct and Ethics page, which lists the 15 October 2026 revision and its effective date. For how ACRA is also dealing with technology in audits, see our sister-site summary of the ACRA audit practice guidance on AI. To confirm that your audit firm is registered, use our guide to checking auditor registration with ACRA.

Frequently asked questions

Does the new rule apply to my company’s accounts for the year ending 31 December 2026?

On ACRA’s wording, no. Section 390 applies to audits and reviews of periods beginning on or after 15 December 2026, and that year began on 1 January 2026. The following year, beginning 1 January 2027, is the first affected period.

Is my company required to do anything under Section 390?

No. It is a Code for public accountants, so the obligations sit with the auditor. Your company will feel it through requests for information and through the time the auditor needs to vet any expert.

Does it matter if my company’s valuer is independent of the auditor?

Yes, for different reasons. If your company engages the valuer, the work is treated as management information and is outside Section 390. If the auditor engages the valuer, the auditor must assess that expert’s objectivity and competence before using the work.

What counts as an “external expert”?

The Code defines it as an expert engaged by the public accountant or the firm, with expertise in a field other than accounting or auditing, whose work is used to help obtain sufficient appropriate audit evidence. Partners and staff of the firm or a network firm are not external experts.

Can an auditor still use an expert in an emerging field?

Yes. The Code recognises that expertise in emerging fields, such as new sustainability measures, may be limited, and allows the auditor to consider the expert’s experience in a similar or established field (paragraphs 390.26 A1 and A2).

Last reviewed: 5 November 2026. The Editorial Team, Raffles Corporate Services.