ACCA Strategic Professional · Advanced Audit and Assurance (International) · Group audits
The group auditor of Meridian Holdings has issued an unmodified opinion. The audit team wishes to mention in the auditor's report that a component auditor audited a material subsidiary, to reassure readers. What does ISA 600 (Revised) require?
The group auditor's report should not refer to a component auditor unless law or regulation requires it. Where reference is made, the report must state that it does not reduce the group engagement partner's or firm's responsibility for the group audit opinion. Dividing responsibility is not allowed.
- AThe report must not refer to the component auditor unless required by law or regulation, and then must state that the reference does not reduce the group engagement partner's responsibilityCorrect
- BThe report must name the component auditor and state the proportion of group assets they audited
- CThe report must divide responsibility between group and component auditors for their respective parts
- DThe report may refer to the component auditor freely if the component auditor consents
Explanation
Under ISA 600 (Revised), the group auditor's report must not refer to a component auditor unless required by law or regulation. Where it does, it must state that the reference does not reduce the group engagement partner's or firm's responsibility for the group opinion. Consent does not change this rule, and dividing responsibility is no longer permitted.
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