ACCA Strategic Professional · Advanced Audit and Assurance (International) · Group audits
Harbor Group's auditor, Delta & Co, plans to use Kestrel LLP as component auditor for a significant overseas subsidiary. Under ISA 600 (Revised), what is the group engagement partner's overall responsibility regarding the work of component auditors?
The group engagement partner remains responsible for the direction, supervision and performance of the group audit and for the group opinion, even when component auditors perform work. Responsibility cannot be passed to the component auditor or divided in the report.
- AThe group engagement partner is responsible for the direction, supervision and performance of the group audit and for the opinion, regardless of component auditor useCorrect
- BResponsibility for the component's financial information transfers entirely to the component auditor once instructions are issued
- CThe group engagement partner is responsible only for the consolidation adjustments, with component auditors responsible for the rest
- DResponsibility is shared equally between the group and component auditors and named in the group auditor's report
Explanation
ISA 600 (Revised) makes the group engagement partner responsible for the group audit engagement and the opinion, including work performed by component auditors. Responsibility cannot be transferred, so option B is wrong. The group auditor's report must not refer to the component auditor as a division of responsibility.
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