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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Using the work of others

Harlow Group's audit engagement partner plans to rely on the work of a component auditor from a different firm for a subsidiary, Tembo Ltd, which is significant because of its size. Under ISA 600 (Revised), which step must the group engagement team perform in relation to the component auditor?

The group engagement team must obtain an understanding of the component auditor, including competence, compliance with relevant ethical requirements and independence, before involving them. Registration is not enough, and the group auditor stays responsible for the group opinion, so it cannot avoid involvement or shift responsibility.

  1. AObtain an understanding of the component auditor, including competence, relevant ethical requirements and independence, before involving themCorrect
  2. BAccept the component auditor's report without further consideration because the component auditor is a registered firm
  3. CReference the component auditor in the group auditor's report to reduce the group auditor's responsibility
  4. DDelegate full responsibility for the opinion on Tembo Ltd to the component auditor and avoid any involvement in the work

Explanation

ISA 600 (Revised) requires the group engagement team to understand the component auditor, including whether they understand and will comply with relevant ethical requirements and independence, and their competence. Registration alone is not sufficient evidence. The group engagement partner remains responsible for the group opinion and cannot reduce that responsibility by referring to the component auditor.

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