EBA欧洲银行-2005_07_29-IAASB_ISA-600_6页_201kb

ISA 600 (Revised): The Audit of Group Financial Statements - Summary of Comments

Core Content

The document presents detailed comments from the Committee of European Banking Supervisors (CEBS) on the International Auditing and Assurance Standards Board (IAASB) Exposure Draft: ISA 600 (Revised) "The Audit of Group Financial Statements". The comments focus on the clarity, practicality, and alignment of the revised standards with the proposed 8th Directive on audit requirements.

Main Views and Key Points

1. Role and Responsibilities of Other Auditors

• The CEBS supports the ISA's clarification of the group auditor's role but highlights the need for more explicit information on the role and responsibilities of other auditors.
• The phrase "involvement in the work that other auditors perform" in paragraph 10(b) is not sufficiently clear or focused as a principle.
• They propose a revised principle: “The group auditor should be involved in the work of the other auditors to the extent necessary to ensure they can place sufficient reliance on the sufficiency and appropriateness of the other auditor's evidence.”
• There is a call for centralizing references to other auditors in the ISA to enhance clarity and understanding.

2. Acceptance or Continuation of Audit Engagements

• The CEBS generally supports the revised standards but suggests greater emphasis on the group's attitude and audit policy.
• They recommend that paragraph 11 be modified to include an understanding of the group's components, their environments, and audit policy, including who audits them and how this is justified.
• A similar suggestion is made for paragraph 13 to elaborate on the group's decision-making process regarding audit policy.

3. Access to Information and Legal Restrictions

• The CEBS supports the approach in paragraphs 18 and 24 but believes more practical examples are needed to address potential restrictions on access to information.
• They also suggest greater definition of the term “pervasive” in paragraph 24 to ensure clarity in audit standards.

4. Incorporation of IAPS Guidance

• The CEBS considers the proposal to move guidance from the proposed International Auditing Practice Statement (IAPS) into the ISA as appropriate.

5. Additional Comments

a. Independence of Other Auditors

• The CEBS believes that auditor independence should be considered in paragraphs 60 and 66, not just professional qualifications and competence.
• They recommend that the independence of other auditors be treated as a key factor in the group auditor's involvement and evaluation.

b. Determining Work on Components

• The use of the word "ordinarily" in paragraphs 52 and 53 is questioned, as it may undermine consistent application of the ISA.
• There is ambiguity in the linkage between paragraph 58 and paragraphs 59-68, which could imply that the actions in 58 override those in 59.
• The CEBS suggests revising the forward reference in paragraph 58 to “paragraphs 61-68” and reorganizing the content for better clarity.

c. Evaluation of Another Auditor's Work

• The CEBS recommends reorganizing the section to first evaluate the evidence on significant components before considering the work of other auditors.
• They suggest moving paragraphs 84 and 85 forward to follow paragraph 77 to provide a more general introduction.
• The use of the present tense in paragraph 84 should be changed to a "should" statement to emphasize its importance.
• The order of paragraphs 79-86 is unclear, and they propose that the group auditor should first review the other auditor's memorandum before assessing further actions.

Audit Documentation

• The CEBS notes that article 27 of the 8th Directive outlines documentation requirements for the group auditor's review of other auditors' work.
• They suggest that the ISA should be aligned with the Directive to facilitate implementation in the European Union.
• Paragraph 107(b) of the ISA is not considered sufficient to meet the documentation needs of article 27.
• The CEBS encourages the IAASB to assess whether the ISA's documentation requirements are adequate for the Directive.

Contact Information

• Jim Sylph
  International Auditing and Assurance Standards Board
  545 5th Avenue, 14th Floor
  New York, New York 10017
  USA
  Edcomments@ifac.org

• Josemaria Roldan
  c-ecs.org
  Tower 42
  25 Old Broad Street
  London EC2N 1HQ
  United Kingdom
  +44 (0)20 7382 1751
  Josemaria.roldan@c-ecs.org

Coordinated by

• Expert Group on Accounting and Auditing (EGAA)
  • Prof Arnold Schilder (+31.20.524.3360)
  • Arnoud Vossen (+31.20.524.3903)
  • Pat Sucher (+44.20.7066.5644)