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

CA Prakash audits the head office of Konark Steels Ltd. and has performed additional procedures on a branch audited by another auditor. Which role do these additional procedures play under SA 600 in his acceptance as principal auditor?

The additional procedures are one of the listed considerations, because they can give the principal auditor significant participation in the audit of the component audited by the other auditor. They do not replace the other factors, such as materiality of his own portion, and they are not limited to foreign branches.

  1. AThey replace the need to consider the materiality of the portion he audits
  2. BThey are considered as a factor, as they may result in his having significant participation in the audit of that branchCorrect
  3. CThey are required only if the branch is located outside India
  4. DThey are a substitute for the other auditor's own audit report

Explanation

The performance of additional procedures regarding components audited by the other auditor, resulting in significant participation, is one of the four considerations for acceptance. It supplements, not replaces, the other factors such as materiality. It is not restricted to foreign branches and does not replace the other auditor's work.

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