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Singapore Standard on Auditing (SSA) 600 (Revised), Special Considerations – Audits of Group Financial Statements (Including the Work of Component Auditors) deals with special considerations that apply to a group audit, including when component auditors are involved.
The standard includes new and revised requirements and application material that better align the standard with recently revised standards such as SSQM 1[1], SSA 220 (Revised)[2] and SSA 315 (Revised 2021)[3]. The new and revised requirements also strengthen the auditor’s responsibilities related to professional skepticism; planning and performing a group audit; two-way communications between the group auditor and component auditor; and documentation.
Below is a summary of the key revisions to the extant standard:
- Introducing a new risk-based approach for planning and performing a group audit engagement, with greater focus on risk assessment and designing responsive audit procedures.
- Clarifying the requirements of quality management in a group audit, including sufficient and appropriate resources to perform the engagement, and the direction and supervision of the engagement team and the review of their work.
- Clarifying the various types of restrictions that may exist, such as restrictions on access to people and information and component auditor audit documentation, and guidance on ways to overcome such restrictions.
- Clarifying how the concepts of materiality and aggregation risk apply in a group audit.
- Enhancing documentation requirements and highlighting the importance of the group auditor’s review of component auditor audit documentation.
- Strengthening and reinforcing the need for robust communication and interactions between the group auditor and component auditors.
- Emphasising the importance of exercising professional skepticism.
SSA 600 (Revised) becomes effective for audits of group financial statements for periods beginning on or after 15 December 2023.
ISCA would like to seek views from key stakeholders on the above exposure draft.
ISCA requires all comments to be submitted to professionalstandards@isca.org.sg by 23 December 2022.
Please click here for ED-SSA 600 (Revised).
[1] Singapore Standard on Quality Management (SSQM) 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements
[2] SSA 200 (Revised), Quality Management for an Audit of Financial Statements
[3] SSA 315 (Revised 2021), Identifying and Assessing the Risks of Material Misstatement