ISCA Issues SSA 600 (Revised), Special Considerations – Audits of Group Financial Statements (Including the Work of Component Auditors)

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 aligns the standard with recently revised standards such as SSQM 1, SSA 220 (Revised) and SSA 315 (Revised 2021). 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.

Click here for SSA 600 (Revised).

Arising from SSA 600 (Revised), conforming and consequential amendments are made to other relevant standards:

• SSQM 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements

• SSQM 2, Engagement Quality Reviews

• SSA 220 (Revised), Quality Management for an Audit of Financial Statements

• SSA 230, Audit Documentation

• SSA 240, The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements

• SSA 250 (Revised), Consideration of Laws and Regulations in an Audit of Financial Statements

• SSA 260 (Revised), Communication with Those Charged with Governance

• SSA 300, Planning an Audit of Financial Statements

• SSA 315 (Revised 2021), Identifying and Assessing Risks of Material Misstatement

• SSA 320, Materiality in Planning and Performing an Audit

• SSA 402, Audit Considerations Relating to an Entity Using a Service Organization

• SSA 501, Audit Evidence—Special Considerations for Selected Items

• SSA 510, Initial Audit Engagements—Opening Balances

• SSA 550, Related Parties

• SSA 570, Going Concern

• SSA 610 (Revised 2013), Using the Work of Internal Auditors

• SSA 700 (Revised), Forming an Opinion and Reporting on Financial Statements

• SSA 701, Communicating Key Audit Matters in the Independent Auditor’s Report

• SSA 705, Modifications to the Opinion in the Independent Auditor’s Report

• SSA 706 (Revised), Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report

• SSA 710, Comparative Information—Corresponding Figures and Comparative Financial Statements

• SSA 720 (Revised), The Auditor’s Responsibilities Relating to Other Information

• SSA 805 (Revised), Special Considerations—Audits of Single Financial Statements And Specific Elements, Accounts or Items of a Financial Statement

• SSRE 2400 (Revised), Engagements to Review Historical Financial Statements

Click here for the list of conforming and consequential amendments arising from SSA 600 (Revised).