Advanced Auditing, Assurance and Professional Ethics · Group Audits

SA 600 Scope, Definitions and Effective Date

Updated 5 October 2026 · Fact-checked

SA 600 (Revised) deals with audits of group financial statements, including the work of component auditors. To solve questions, identify the group engagement partner, find who audits each component, apply the definitions, and check which standard fits the arrangement. For the effective date, quote only what the ICAI-issued text states.

Understand SA 600 Scope, Definitions and Effective Date

Many groups have branches, divisions, subsidiaries, joint ventures or associates that someone else audits. One auditor signs the report on the whole. That auditor needs a way to involve and rely on the others' work. SA 600 (Revised) gives the framework.

The original SA 600 dealt with using the work of another auditor. Answer on SA 600 (Revised) and its group audit terms. For its exact title and effective date, follow the ICAI-issued text. Do not quote a date you cannot confirm from that text.

The group engagement partner is the partner responsible for the group audit engagement and its performance, and for the auditor's report on the group financial statements. A component auditor is an auditor who performs work on the financial information of a component for the group audit. The component auditor may be from the same firm or network, or from another firm.

A component is an entity or business activity for which group or component management prepares financial information that is required to be included in the group financial statements. A branch, division, subsidiary, joint venture or associate may be a component, but these are only illustrations. The test is the definition. Think of it as a unit whose numbers flow into the main financial statements.

Where a company's branch is audited by a branch auditor under Section 143(8) of the Companies Act, 2013, the Act's branch audit provisions apply as well as SA 600 (Revised). Check both when a case involves a statutory branch auditor.

SA 600 (Revised) is about how the group engagement partner plans and performs the group audit, and how the work of component auditors is directed, evaluated and relied on. Use the facts to match the arrangement to the right standard. Joint audits are dealt with under SA 299. Opening balances in an initial audit engagement, including use of the predecessor auditor's report or working papers, are dealt with in SA 510. Be sure of the roles first. Most marks are lost by labelling the wrong person as the group engagement partner.

Key rules to remember

Group engagement partner: Group engagement partner = partner responsible for the group audit engagement and for the auditor's report on the group financial statements; Decided by who signs the report on the group, not by size of firm or fees.
Component auditor: Component auditor = auditor who performs work on the financial information of a component for the group audit; The group engagement partner remains responsible for the group audit and decides how to direct and use the component auditor's work.
Component: Component = entity or business activity for which group or component management prepares financial information that is required to be included in the group financial statements; A component is a unit of the group, not an auditor. Branch, division, subsidiary, joint venture and associate are illustrations only, not the definition.
Related standards: Joint audits: SA 299. Opening balances in initial audit engagements (including use of the predecessor auditor's report or working papers): SA 510. Group audits and component auditors: SA 600 (Revised); Use this only to match the standard to the situation. Do not present it as a formal list of scope exclusions for SA 600 (Revised).
Effective date: SA 600 (Revised): effective date as stated in the ICAI-issued standard; Quote a date only if you have confirmed it from the ICAI text or the question gives it. Do not guess or quote a date from old notes.

How to solve SA 600 Scope, Definitions and Effective Date questions

Use this method for any question on scope, definitions or applicability of SA 600 (Revised).

1Read the facts and list the group, its auditor, and each component with its auditor.
2Ask whose report covers the group financial statements. That auditor's partner is the group engagement partner.
3Label every auditor who performs work only on a component's financial information as a component auditor.
4Check each unit against the definition: an entity or business activity whose financial information is prepared and required to be included in the group financial statements. A branch, division, subsidiary, joint venture or associate may qualify, but test the definition, not the name.
5Match the arrangement to the standard. Auditors appointed jointly for the same audit fall under SA 299. An opening balances issue in an initial audit, including use of the predecessor auditor's report or working papers, falls under SA 510. Use of component auditors in a group audit falls under SA 600 (Revised).
6State the consequence: the group engagement partner is responsible for the group audit and must decide how to direct, evaluate and use the component auditors' work.
7If the question mentions timing, use the effective date given in the question or in the ICAI-issued SA 600 (Revised). Do not state a date from memory that you cannot confirm.
8Close with a one-line conclusion naming the group engagement partner, the component auditors and the applicable standard.

Quickest way: Role-tagging in 60 seconds

When to use it: Use it for case-scenario MCQs and for short-answer parts that ask who is who or which standard applies.

Underline each auditor and each entity or unit in the case.
Mark the signer of the group report as G (group engagement partner's firm).
Mark everyone who works only on a unit's financial information as C (component auditor).
If the auditors are joint auditors on the same audit, tag the case to SA 299, not to component auditor roles.
Write the definitions in one line each, then the conclusion.

Common mistakes in SA 600 Scope, Definitions and Effective Date

Treating the larger or more senior firm as the one responsible for the group audit.
Students link the role to size or reputation.
Fix: Decide by whose report covers the group financial statements that include other auditors' components.
Applying SA 600 (Revised) to joint auditors.
Both situations involve more than one auditor.
Fix: Joint auditors share one audit and are dealt with under SA 299. SA 600 (Revised) applies where a group audit uses component auditors.
Calling the component an auditor, or the component auditor a component.
The terms sound alike and students mix labels and people.
Fix: A component is a unit such as a branch or subsidiary. The component auditor is the person who works on it.
Deciding that a unit is a component only because it has a familiar name such as branch or subsidiary.
Students memorise examples instead of the definition.
Fix: Apply the definition. The unit must be an entity or business activity for which financial information is prepared and required to be included in the group financial statements. The examples are illustrative only.
Thinking the group engagement partner can ignore the component auditor's work because the partner signs the report.
Signing the report is mistaken for total control.
Fix: The group engagement partner is responsible for the group audit and must decide how to direct and evaluate the component auditor's work and how far to use it.
Quoting the old SA 600 approach, or a date from old notes, as the current position.
Older notes and books still describe the original standard.
Fix: Answer on SA 600 (Revised) using group, group engagement partner and component auditor terms. Take the effective date only from the ICAI-issued text.

Worked examples

Example 1

Alpha Ltd is audited by Rao & Co and prepares consolidated financial statements. Alpha has two subsidiaries: Beta Ltd, audited by Tiwari & Co, and Gamma Ltd, audited by Sen & Co. Identify the group engagement partner's firm, the component auditors and the components under SA 600 (Revised).

Show the solution

Rao & Co reports on the consolidated financial statements of the Alpha group. Its engagement partner is the group engagement partner.
Beta is a subsidiary whose financial information is required to be included in the consolidated financial statements. Beta is a component. Tiwari & Co works on Beta's financial information, so it is a component auditor.
Gamma is also a subsidiary whose financial information is included in the consolidated financial statements. Gamma is a component. Sen & Co works on Gamma's financial information, so it is a component auditor.
If only Alpha's standalone statements were in question, the subsidiaries' numbers would not be included in them, so state the assumption that consolidated statements are being audited.
Conclusion: the group engagement partner at Rao & Co is responsible for the group audit and must decide how to direct and evaluate the component auditors' work and how far to use it.

Answer: Rao & Co's engagement partner is the group engagement partner. Tiwari & Co (Beta) and Sen & Co (Gamma) are component auditors. Beta and Gamma are components, because their financial information is included in the consolidated financial statements.

Example 2

Gupta & Co and Menon & Co are appointed joint auditors of Zeta Ltd. Menon & Co audits the northern region and Gupta & Co audits the rest. The client asks whether SA 600 (Revised) applies and who is the component auditor.

Show the solution

Check the appointment: both firms are appointed jointly to audit the same company.
Joint audits are dealt with in SA 299. SA 600 (Revised) deals with group audits where component auditors work on components.
Neither firm is engaged only to work on a component for the other's report. So neither is a component auditor in the SA 600 (Revised) sense.
The division of work and responsibility between joint auditors is governed by SA 299 and the joint audit requirements.
Conclusion: treat this arrangement under SA 299, not as a component auditor arrangement under SA 600 (Revised).

Answer: This is a joint audit, dealt with under SA 299. Gupta & Co and Menon & Co are joint auditors, so neither is a component auditor under SA 600 (Revised).

Exam tips

Start every case answer by naming the group engagement partner's firm and the component auditors. It shows the examiner you have the roles right.
Write the definitions of group engagement partner, component auditor and component in the standard's own terms, then apply them to the facts.
Name the right standard for the arrangement, for example SA 299 for joint auditors and SA 510 for opening balances in an initial audit engagement. This is a favourite trap in MCQs.
If the question asks about applicability or timing, use the date given in the question or the ICAI-issued text. Do not pad beyond that.
Use provision-facts-conclusion form: define the term, apply it to the case, then state the conclusion.

Practice questions from Group Audits

SA 600 Scope, Definitions and Effective Date in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

CMA IntermediateSA 200 to SA 299: General Principles and Responsibilities

SA 600 Scope, Definitions and Effective Date: frequently asked questions

Who is the group engagement partner under SA 600 (Revised)?

The group engagement partner is the partner responsible for the group audit engagement and for the auditor's report on the group financial statements. The role depends on who signs the report on the group, not on firm size.

What is a component in SA 600 (Revised)?

A component is an entity or business activity for which group or component management prepares financial information that is required to be included in the group financial statements. A branch, division, subsidiary, joint venture or associate may be a component, but these are only examples. A component is a part of the group, not an auditor.

Does SA 600 (Revised) apply to joint auditors?

Joint audits are dealt with in SA 299, where auditors share responsibility for the same audit. SA 600 (Revised) deals with group audits and the use of component auditors' work. Match the facts to the right standard.

What is the effective date of SA 600?

Take the effective date of SA 600 (Revised) from the ICAI-issued standard, and quote it only if you have confirmed it there. Do not rely on dates from old notes. In an answer, name the revised standard and its group audit terms.