Microsoft Word A033 2010 iaasb handbook isa 600

Involvement in the Work Performed by Component Auditors 

(Ref: Para. 30–31) 

A54.  Factors that may affect the group engagement team’s involvement in the work 

of the component auditor include: 

(a) 

The significance of the component; 

(b) 

The identified significant risks of material misstatement of the group 

financial statements; and 

                                                 

22

   ISRE 2400, “Engagements to Review Financial Statements.” 

23

   ISRE 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity.” 

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SPECIAL CONSIDERATIONS—AUDITS OF GROUP FINANCIAL STATEMENTS  

(INCLUDING THE WORK OF COMPONENT AUDITORS) 

ISA 600 

 

610

(c) 

The group engagement team’s understanding of the component auditor. 

 

In the case of a significant component or identified significant risks, the group 

engagement team performs the procedures described in paragraphs 30–31. In the 

case of a component that is not a significant component, the nature, timing and 

extent of the group engagement team’s involvement in the work of the component 

auditor will vary based on the group engagement team’s understanding of that 

component auditor. The fact that the component is not a significant component 

becomes secondary. For example, even though a component is not considered a 

significant component, the group engagement team nevertheless may decide to be 

involved in the component auditor’s risk assessment, because it has less than 

serious concerns about the component auditor’s professional competency (for 

example, lack of industry specific knowledge), or the component auditor does not 

operate in an environment that actively oversees auditors. 

A55.  Forms of involvement in the work of a component auditor other than those 

described in paragraphs 30–31 and 42 may, based on the group engagement 

team’s understanding of the component auditor, include one or more of the 

following:

 

(a) 

Meeting with component management or the component auditors to obtain 

an understanding of the component and its environment. 

(b) 

Reviewing the component auditors’ overall audit strategy and audit plan. 

(c) 

Performing risk assessment procedures to identify and assess the risks of 

material misstatement at the component level. These may be performed 

with the component auditors, or by the group engagement team. 

(d) 

Designing and performing further audit procedures. These may be designed 

and performed with the component auditors, or by the group engagement 

team. 

(e) 

Participating in the closing and other key meetings between the component 

auditors and component management. 

(f)  Reviewing other relevant parts of the component auditors’ audit 

documentation.