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CA Final · Advanced Auditing, Assurance and Professional Ethics · Group Audits

Before accepting the role of principal auditor for an entity whose components are audited by other auditors, CA Rohit lists the matters he should consider about his own participation. Which of the following is NOT one of the considerations stated in SA 600 for this purpose?

The audit fee charged by the other auditors is not a stated consideration. SA 600 requires the principal auditor to consider materiality of the portion he audits, his knowledge of the components' business, the misstatement risk in the other auditor's components, and additional procedures performed.

  1. AThe materiality of the portion of the financial information that he audits himself
  2. BHis degree of knowledge of the business of the components
  3. CThe audit fee charged by the other auditors for the componentsCorrect
  4. DThe risk of material misstatements in the financial information of the components audited by the other auditor

Explanation

The standard lists four considerations: materiality of the portion the principal auditor audits, his knowledge of the components' business, the risk of material misstatement in the components audited by the other auditor, and additional procedures giving significant participation. The fee charged by the other auditors is not among them.

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