News May FRC Welcomes the IAASB release of the exposure draft for proposed ISA 600

FRC Welcomes the IAASB release of the exposure draft for proposed ISA 600

04 May 2020
The FRC welcomes the release of the International Auditing and Assurance Standards Board’s (IAASB), exposure draft of proposed International Standard on Auditing (ISA) 600 (Revised), Special Considerations – Audits of Group Financial Statements (Including the Work of Component Auditors).  The proposed revisions enhance the risk-based approach to undertaking a group audit and reinforce the need for robust communication and interactions between the group engagement team, group engagement partner and component auditors, which along with other proposed revisions, the FRC believes will be beneficial in improving the quality of group audits.
The FRC also welcomes the IESBA proposals to revise the Independence Standards so that they are more “robust, comprehensive and clear when applied in a group audit context”. Including IESBA proposals to clarify the requirements for non-network component auditors, an area of significant importance when applying both the current and proposed ISA 600 to engagements which are conducted across jurisdictions with potentially differing ethical requirements. This will bring international standards into line with the FRC’s own Ethical Standard.

Mark Babington, Acting Executive Director of Regulatory Standards said “The UK supports the development of high-quality global standards for corporate reporting and audit, enabling the UK to attract high quality global investment.  The proposed standard includes a comprehensive and principles-based approach to delivering group audits that meets the needs of users and protects the public interest.”