Hermit Galleries plc are international art dealers with a turnover of £30m a year. They specialize in Impressionist paintings and have an inventory valued at £20m. Recently it has been rumored that some £9m worth of their inventory may be the work of a particularly brilliant forger. Towards the end of the financial year the company has agreed with the auditor to commission a report on the authenticity of the inventory from a well-known academic expert.

Discussion
– Draw up the terms of reference for the expert.
– Draft a checklist to examine the expert’s report as audit evidence.
– The actual expert’s opinion was certainty on the authenticity of £5.1m worth, certainty on the forged nature of £2.2m worth and doubt about the remainder.
– What should the auditor do?