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

Harlow Group's auditor, Brindle & Co, plans to use the work of a component auditor from a different network firm for the audit of a significant overseas subsidiary. Which action is required by ISA 600 (Revised) before the group engagement team can decide how to involve that component auditor?

The group team must first understand the component auditor, including its competence, independence and compliance with relevant ethical requirements. Responsibility for the group opinion stays with the group engagement partner, so work cannot simply be relied on or shared through report references.

  1. AObtain an understanding of the component auditor, including whether it understands and will comply with relevant ethical requirements and is independentCorrect
  2. BInclude a reference to the component auditor in the group auditor's report to share responsibility
  3. CRequire the component auditor to issue its own opinion on the group financial statements
  4. DRely on the component auditor's work without evaluation if the component is audited under local law

Explanation

ISA 600 (Revised) requires the group engagement team to understand the component auditor, including ethical compliance, independence and competence. Referring to the component auditor in the report does not reduce the group engagement partner's responsibility, and local statutory audit does not remove the need for evaluation.

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