Tuesday, May 17, 2022
Recognising that many Australian audits today are audits of group financial statements and that the global environment makes group audits more complex and challenging, the AUASB has approved and released the revised ASA 600 Audits of a Group Financial Report (Including the Work of Component Auditors), effective for reporting periods commencing on or after 15 December 2023. ASA 600 is expected to enhance audit quality by strengthening the accountability of group auditors and clarifying the interactive relationship between group and component auditors.
ASA 600 deals with the special considerations that apply to a group audit, including in those circumstances when component auditors are involved while recognising that the Group Engagement Partner remains ultimately responsible for managing and achieving quality on the group audit engagement.
ASA 600 is closely aligned to the recently revised Quality Management suite of standards which strengthens and improves the management of quality at the group engagement level and the component level by adopting a risk-based approach to planning and performing a group audit engagement. A risk-based approach facilitates a greater focus on identifying, assessing and responding to risks of material misstatement to the group financial report. Under the risk-based approach component auditors can be, and often are, involved in all phases of the group audit. ASA 600 reinforces the need for robust communication and interactions during the group audit and fostering an appropriately independent and challenging sceptical mindset of the auditor.