ASA 600 Special Considerations—Audits of a Group Financial Report (Including the Work of Component Auditors) is operative for 31 December audits.
In our most recent GAAPinar series, we covered the first of three training sessions on ASA 600/ISA 600 that examined key changes from the old to the revised standard. This GAAPinar will address the standard’s mandatory requirements from the perspectives of the group and component-audit auditor.
Two scoping issues need emphasis:
- The group may consist of a parent and one or more subsidiaries, joint ventures, and investments accounted for by the equity method. The group may be organised by geography, by other economic units (including branches or divisions), and by functions and business activities, and
- ASA 600 is also useful in a non-group audit when the engagement team includes individuals from another firm.
This session will cover:
- Leadership and new ethical responsibilities
- Overall group-audit strategy and plan
- Understanding the group’s system of internal control
- Identifying and assessing the risks of material misstatement
- Materiality
- Responding to the assessed risks of material misstatement
- Evaluating the work of the component auditor, and
- Audit evidence and documentation.
