The APB today issued a revision of ISA (UK and Ireland) 600, 'Using the Work of Another Auditor', effective for audits of financial statements for periods commencing on or after 6 April 2008.

The main effect of the revision is to add a new requirement that in an audit of group financial statements the principal auditor should document any review that it undertakes, for the purpose of the group audit, of the audit work conducted by other auditors. This reflects a new requirement in Schedule 10, paragraph 10A, of the Companies Act 2006, implementing a provision of the European Statutory Audit Directive.

Richard Fleck, Chairman of the APB, commented:

“This change to ISA (UK and Ireland) 600 has been made to achieve consistency with the requirements of the Companies Act 2006. More extensive changes to ISA (UK and Ireland) 600 have not been made at this stage – later in the year the APB will consider the timing of implementing changes made by the International Auditing and Assurance Standards Board to ISA 600.”

The revised standard can be downloaded, free of charge, from the Publications / Auditing Standards (ISAs (UK and Ireland)) section of the APB’s website (www.frc.org.uk/apb). Printed copies will be available in late April from:

FRC Publications
145 London Road
Kingston upon Thames
Surrey KT2 6SR

Telephone: 020 8247 1264
Fax: 020 8247 1124
Email: customer.services@cch.co.uk  
Website: www.frcpublications.com  

1. The Financial Reporting Council (FRC) is the UK’s independent regulator responsible for promoting confidence in corporate reporting and governance. Its functions are exercised principally by its operating bodies (the Accounting Standards Board, the Auditing Practices Board, the Board for Actuarial Standards, the Financial Reporting Review Panel, the Professional Oversight Board and the Accountancy and Actuarial Discipline Board) and by the Committee on Corporate Governance.
2. The APB is committed to leading the development of auditing practice in the United Kingdom and the Republic of Ireland so as to:
   • establish high standards of auditing;
   • meet the developing needs of users of financial information; and
   • ensure public confidence in the auditing process.
3. The APB issued a consultation paper in December 2007 explaining the proposed revision of ISA (UK and Ireland) 600. In that consultation paper the wording of the proposed new requirement was closely based on a corresponding requirement in ISA 600 (Revised and Redrafted), “Special considerations – Audits of group financial statements (including the work of component auditors)” which had recently been finalised by the International Auditing and Assurance Standards Board (IAASB) as part of its Clarity Project. Responses to the consultation acknowledged the merit of reflecting the IAASB wording but there were concerns that it did not sufficiently correspond to the specific UK legal requirement. The APB agreed that these concerns were valid and amended the wording of the new requirement to reflect better the Companies Act 2006.
4. Some responses to the consultation paper also suggested that the APB provide guidance on new legal provisions concerning the provision of access by audit oversight bodies to group audit working papers. These aspects of the law are being addressed in audit regulations promulgated by the Recognised Supervisory Bodies and the APB concluded that it would not be appropriate to provide separate guidance on them in ISA (UK and Ireland) 600; however, a footnote has been added drawing attention to the existence of the audit regulations in this area.
5. For further information please contact Jon Grant, APB Executive Director, on 020 7492 2410.