CHAPTER 26

USING THE WORK OF

OTHERS
Considering Audits of Group Financial
Statements
(including the work of component Auditors)

• A Component Auditor is an auditor who at the request

engagement team performs work on financial
information related to a component for the group audit.

• Group audit is the audit of group financial statements

or combined financial statements aggregating the
financial information prepared by components.
Objectives:

a)To determine whether to act as the auditor of the

group financial statements

b) To communicate clearly with component auditors

about the scope and timing of their work on financial
information related to components and their findings
c) To obtain sufficient appropriate audit evidence
about the financial information of the components and the
consolidation process to express an opinion whether the
group financial statements are prepared, in all material
respects.
Basic Requirements

Responsibility
The group engagement partner is responsible for the
direction , supervision and performance of the group
audit engagement in compliance with professional
standards and regulatory and legal requirements,

Acceptance and Continuance

In applying PSA 220 (Redrafted), the group engagement
partner shall determine whether sufficient appropriate
audit evidence can reasonably be expected to be
obtained in relation to the consolidation process and the
financial information of the components,
Terms of Engagement
the group engagement partner shall agree on the terms of
the group audit engagement

Overall Audit Strategy and Audit Plan

The group engagement team shall establish an overall
group audit strategy and shall develop a group audit
plan in accordance with PSA 300 (Redrafted).
The group engagement partner shall review the overall
group audit strategy and group audit plan.
Considering the work of Internal auditor

PSA 610 (Redrafted) “ Using the work of Internal Auditors”

deals with the external auditor’s responsibilities regarding
the work of internal auditors when the external auditors has
determined, in accordance with PSA 315 (Redrafted) that the
internal audit function is likely to be relevant to the audit.

Objectives:
a) whether, and to what extent to use specific work of the
internal auditors
b) Whether such work is adequate for the purpose of the
audit
Documentation
the external auditors shall document conclusions regarding the
evaluation of the adequacy of the work of the internal
auditors, and the audit procedures performed by the external
auditor on that work, in accordance with paragraph 11 of PSA 610
(Redrafted)

Using the work of an Expert/ Specialist

PSA 620 (Revised and Redrafted) “Using the work of an Auditor’s
Expert” deals with auditor’s responsibilities regarding the use of an
individual or organization’s work in a field of expertise other than
accounting or auditing, when that work is used to assist the auditor
in obtaining sufficient appropriate audit evidence.

The Auditor’s responsibility for the Audit Opinion

The auditor has sole responsibility for the audit opinion
expressed and that responsibility is not reduced by the auditor’s
use of the work of an auditor’s expert.
Objectives
The objectives of the audit are:
a) to determine whether to use the work of an auditor’s expert
b) if using the work of an auditor’s expert, to determine
whether that work is adequate for the auditor’s purposes