Group Audits – ISA 600

SUMMARY

In developing its Work Plan for 2015‒2016, the IAASB agreed to focus on those areas from the ISA post-implementation review where key and important findings had indicated a necessity for priority consideration of changes to some aspects of the relevant ISA. Accordingly, the IAASB included a project on Group Audits in the 2015‒2016 Work Plan. 

The IAASB commenced work on one aspect of this project relating to the responsibilities of the engagement partner in circumstances where the engagement partner is not located where the majority of the audit work is performed in December 2014. A Staff Audit Practice Alert on this aspect was published in August 2015. Information gathering on the broader aspects of group audits commenced in early 2015, with the working group reflecting on the issues identified through the ISA post-implementation review, inspection findings and ongoing outreach. It was agreed that further consultation was needed to properly understand the issues and inform related standard setting proposals. The IAASB therefore agreed to consult publicly.

At the same time, the IAASB had also commenced work on quality control and professional skepticism (other priority projects in the 2015‒2016 Work Plan). As the various working groups further discussed the issues, it was recognized that there was overlap between some of the issues relating to quality control, professional skepticism and group audits, and therefore a combined approach to consultation was deemed appropriate.

Using the information gathered to date about the issues, and discussion by the IAASB working groups on each topic about possible actions the IAASB might take to address the issues, the IAASB published the Invitation to Comment (ITC), Enhancing Audit Quality: A Focus on Professional Skepticism, Quality Control and Group Audits in December 2015. In addition to posing specific questions on the issues relating to professional skepticism, quality control and group audits, and possible responses, the IAASB also sought input on the most significant public interest issues that should frame its responses to the projects on professional skepticism, quality control and group audit. Eighty-seven responses to the ITC were received from a broad range of stakeholders. 

SUMMARY

In December 2016 the IAASB approved a project proposal for the revision of the IAASB’s International standards relating to quality control and group audits. The development of the project proposal was informed by the responses to the ITC and other input gathered during outreach, as well as discussions with the IAASB and CAG.

The project proposal describes how the public serves the public interest, the project objectives, the scope of the project and an outline of the project, including major issues that will be addressed.