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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Group audits

In the auditor's report on the consolidated financial statements of Lyra Group, the group engagement partner wishes to include a statement that part of the audit was performed by component auditors, to share responsibility. Under ISA 600 (Revised), what is the correct approach?

The report must not refer to component auditors in a way that divides responsibility. The group engagement partner remains solely responsible for the group opinion, so a statement aimed at sharing or reducing that responsibility is inappropriate, whether or not the component is overseas or the component auditor consents.

  1. AInclude the statement, as it reduces the partner's responsibility for the opinion
  2. BDo not refer to component auditors in a way that suggests divided responsibility, as the report must state the group team's responsibility for the opinionCorrect
  3. CInclude the statement only if the component auditor consents in writing
  4. DInclude it only for overseas components

Explanation

ISA 600 (Revised) states that the group auditor's report must not refer to a component auditor in a way that suggests a division of responsibility, as the group engagement partner remains solely responsible. Consent or location of the component does not change this. Referring to them to reduce responsibility is therefore inappropriate.

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