Proposed International Standard on Auditing 600 (Revised): Special Considerations — Audits of Group Financial Statements (Including the Work of Component Auditors)

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To ensure that International Standards on Auditing (ISAs) continue to provide a foundation for high-quality global audits, the IAASB Exposure Draft, ISA 600 (Revised), Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors), proposes more robust requirements and enhanced guidance that:

  • Clarifies the scope and applicability of the standard.
  • Emphasizes the importance of exercising professional skepticism throughout the group audit.
  • Clarifies and reinforces that all ISAs need to be applied in a group audit through establishing stronger linkages to the other ISAs, in particular to proposed ISA 220 (Revised), ISA 315 (Revised 2019) and ISA 330.
  • Focus the group engagement team’s attention on identifying and assessing the risks of material misstatement of the group financial statements and emphasizes the importance of designing and performing procedures that are appropriate to respond to those assessed risks. When component auditors are involved, the proposed standard highlights the importance of the group engagement team’s involvement in the component auditor’s work.
  • Reinforces the need for robust communication and interactions between the group engagement team, group engagement partner and component auditors.
  • Includes new guidance on testing common controls and controls related to centralized activities.
  • Includes enhanced guidance on how to address restrictions on access to people and information.
  • Enhances special considerations in other areas of a group audit, including materiality and documentation.