62. The following are areas where the external auditor may need to use the work of an auditor's expert.

(a) Forecasts and FLI

63. FLI feeds into macroeconomic scenarios and weighting and can be of a specialised nature. Some examples of FLI include macroeconomic indicators, predictions of credit defaults and estimates of recoveries. Auditor's experts in econometric modelling, credit risk or valuation may support the external auditor in:

• assessing the reasonableness and appropriateness of management's projected economic variables and detailed forecast period through peer comparison and use of expert judgment;

• assessing the internal consistency of management's forecasts and elements of FLI that are used for internal and external reporting purposes;

• assessing the reasonableness of management's key assumptions pertaining to the projection of future recoveries by providing independent views of:

o the likelihood of success of proposed recovery action;

o the viability of alternative recovery strategies;

o the projected recoverable amounts; and

o whether management has considered all reasonable available information in making its recovery assumptions;

• assessing the reasonableness of management's land and property valuation estimates, and the projected valuations of other types of collateral.