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

Marlowe & Co is the group auditor of Crestline Group. A component auditor in another jurisdiction is not subject to the IESBA Code but to local ethical rules. Which approach is consistent with ISA 600 (Revised)?

The group team must determine that the component auditor understands and will comply with the ethical requirements relevant to the group audit, including independence. Independence is not only the group auditor's concern, local rules are not automatically sufficient if less stringent, and joining the group auditor's firm is not required.

  1. AThe group team should determine whether the component auditor understands and will comply with the ethical requirements relevant to the group audit, including independenceCorrect
  2. BThe group team can disregard independence because only the group auditor must be independent
  3. CThe group team should require the component auditor to join the group auditor's firm
  4. DThe group team should accept local ethical rules in all cases, even if they are less stringent than those relevant to the group audit

Explanation

ISA 600 (Revised) requires the group team to obtain an understanding of whether the component auditor understands and will comply with the ethical requirements relevant to the group audit, including independence. Local rules that are less stringent than those relevant to the group audit are not automatically acceptable. Joining the firm is not required, and independence is required of component auditors too.

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