AASB Response Letter – IAASB Exposure Draft on Audits of Group Financial Statements
Oct 19, 2020
On October 19, 2020, the Auditing and Assurance Standards Board (AASB) announced that their letter responding to the International Auditing and Assurance Standards Board’s (IAASB) Exposure Draft, "International Standard on Auditing (ISA) 600 (Revised), Special Considerations – Audits of Group Financial Statements (Including the Work of Component Auditors)" was released by the IAASB. The exposure draft outlines more robust requirements and enhanced guidance on auditing group financial statements.
The response letter highlights the AASB's support for the proposed changes, which clarify many of the issues raised by stakeholders regarding the extant ISA 600. The AASB is pleased with how the IAASB developed ED-600 after determining the foundational principles of conducting a risk-based audit. They believe that developing ISA 315 (Revised), Identifying and Assessing the Risks of Material Misstatement and the proposed quality management standards were important first steps to building ED-600.
The letter encourages the IAASB to consider adding further clarity and guidance regarding the involvement of component auditors in conducting risk assessment procedures. Furthermore, the AASB requests that the IAASB considers developing a more comprehensive approach to the use of audit evidence from audits performed for other purposes.
Review the press release and letter on the AASB's website.
