The International Auditing and Assurance Standards Board released a revised standard Thursday to focus on the special considerations that apply to audits of group financial statements.
ISA 600 (Revised) takes a risk-based approach to planning and conducting a group audit. The new approach aims to concentrate the group auditor’s attention and work on identifying and weighing the risks of a material misstatement of the group financial statements and designing and performing additional audit procedures to respond to those risks. The standard-setters recognized that component auditors can be (and frequently are) involved in all phases of a group audit. The standard employs a comparatively clear, proactive and scalable approach for group audits that can be used in today’s evolving group audit structures.
“ISA 600 (Revised) is a significant step forward to enhance the consistent performance of quality group audit engagements and thereby supports users’ interests and broader financial stability,” said IAASB chair Tom Seidenstein in a statement Thursday. “Group audits are an area identified by regulators requiring attention. The changes in the standard build off other recent IAASB revisions, such as the revisions to the quality management standards, and should enhance audit quality by strengthening the accountability of group auditors and clarifying the interactive relationship between group and component auditors.”
In addition to the standard, the IAASB, which is affiliated with the International Federation of Accountants, has posted a basis for conclusions and fact sheet on the
The revised standard takes effect for audits of group financial statements for periods starting on or after Dec. 15, 2023.
