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

Tarn Group's auditor, Brightwell & Co, is the group engagement partner. A subsidiary, Lowen Ltd, is audited by a different firm, Ashby LLP, which is a component auditor. Brightwell intends to use Ashby's work. Under ISA 600 (Revised), what is the group engagement partner's responsibility for the group audit opinion?

The group engagement partner remains responsible for the direction, supervision and performance of the group audit and for the opinion issued. Using a component auditor such as Ashby LLP does not transfer or share that responsibility, and the auditor's report must not refer to the component auditor.

  1. AThe group engagement partner is responsible for the direction, supervision and performance of the group audit and the resulting opinion, even when component auditors are usedCorrect
  2. BResponsibility for the opinion on Lowen's information passes to Ashby LLP once its work is accepted
  3. CThe group opinion must refer to Ashby LLP as responsible for the audit of Lowen Ltd
  4. DResponsibility is shared equally between the group and component auditors

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 is not divided or transferred. Referring to a component auditor in the opinion is not allowed, because it would imply a division of responsibility.

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