Canadian Auditing Standards

Group Audits

Summary

Many audits today are audits of group financial statements – also known as group audits – these types of engagements can be very challenging.

Staff Contact(s)

Birender Gill, CPA, CA Principal, Auditing and Assurance Standards Board

+1 416 204 3298

[email protected]

Project Status

Information gathering

Completed prior to 2016
Approving project

The IAASB approved project proposal in December 2016
Consulting stakeholders

Exposure Draft issued May 11, 2020

Consultation activities took place between May and September 2020
Deliberating feedback

IAASB has deliberated feedback received on the Exposure Draft

AASB Response
Final pronouncement

AASB approved the final standard in March 2022

CAS 600 issued in Handbook in August 2022

AASB response to the IAASB Exposure Draft on Audits of Group Financial Statements

Our response letter highlights our support for the proposed changes, which clarify many of the issues raised by stakeholders regarding the extant ISA 600.

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News

April 26, 2022 News

Update: AASB approves revised CAS 600, Special Considerations - Audits of Group Financial Statements

At the March 7-8, 2022, Board meeting, the AASB approved CAS 600, Special Considerations – Audits of Group Financial Statements (Including the Work of Component Auditors), subject to the PIOB’s due process approval. The PIOB has now confirmed due process for ISA 600 (revised) and the IAASB has released ISA 600 (revised). CAS 600 will become effective for audits of group financial statements for periods beginning on or after December 15, 2023. CAS 600 is anticipated to be issued in the Handbook in August 2022.

May 11, 2020 Document for Comment

AASB Exposure Draft – Audits of Group Financial Statements (Including the Work of Component Auditors)

The AASB issued an Exposure Draft proposing the adoption of ISA 600 (Revised), with appropriate Canadian amendments. Stakeholders are invited to comment until September 11, 2020. For full details, visit the Document for Comment page.

May 1, 2020 International Activity

IAASB Exposure Draft – ISA 600, Audits of Group Financial Statements

The International Auditing and Assurance Standards Board (IAASB) issued its Exposure Draft, ISA 600, Special Considerations – Audits of Group Financial Statements (Including the Work of Component Auditors). Comments are due to the IAASB on October 2, 2020.

Meeting & event summaries

April 12, 2022 AASB Decision Summary – March 7-8, 2022

The AASB discussed an issue Canadian stakeholders raised about how the scope of revised CAS 600, Special Considerations – Audits of Group Financial Statements (Including the Work of Component Auditors), applies to financial information of pension plans that are included in financial statements of public sector entities, such as provinces. The Board concluded that a Canadian amendment was not necessary.

CAS 600 contains one Canadian amendment to align the illustrative report in Appendix I of the standard to CAS 700, Forming an Opinion and Reporting on Financial Statements. The AASB unanimously agreed that re-exposure of CAS 600 was not necessary since of the Canadian amendment was contemplated in the Exposure Draft and stakeholders raised no concerns.

The AASB unanimously approved CAS 600 and the related conforming amendments to other CASs and OCSs, subject to the Public Interest Oversight Board’s due process approval of ISA 600 in April 2022.

CAS 600 will become effective for audits of group financial statements for periods beginning on or after December 15, 2023.

Once the AASOC confirms that the AASB followed due process with proper regard for the public interest, the final standard and the related conforming amendments will be issued in the Handbook in August 2022.

February 8, 2022 AASB Decision Summary – November 29-30, 2021

The AASB discussed issues related to the IAASB’s project to revise ISA 600, Special Considerations – Audits of Group Financial Statements (Including the Work of Component Auditors). Key issues discussed included:

further clarification required of the actions the group auditor considers when communications from the component auditor are not adequate for the group auditor’s purposes;
clarifying the requirement regarding the group auditor communicating with component auditors matters that the group auditor or component auditor determines to be relevant to the design of responses to the assessed risks of material misstatement;
support for retaining the sentence outlining the expectation that component auditor audit documentation does not need to be replicated in the group auditor file;
a review of the conforming and consequential amendments related to ISA 600;
a review of the disposition of comments showing how issues raised in the AASB’s response letter to the ISA 600 exposure draft were addressed; and
implementation risks and plan to develop guidance to support the implementation of CAS 600.

The IAASB is expected to approve ISA 600 (Revised) at the December 2021 meeting. The AASB would approve CAS 600 in early 2022.

September 9, 2021 AASB Decision Summary – September 9-10, 2021

the need for guidance on using audit evidence from an audit conducted for statutory purposes, whether already completed or being performed; and
how the group auditor determines whether, and to what extent, to review parts of the component auditor audit documentation.

The IAASB is expected to approve ISA 600 (Revised) at its December 2021 meeting. The AASB would approve CAS 600 in early 2022.

Disclaimer

This project summary has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on this project, which may change after further Board deliberations. Decisions to publish Handbook material are final only after a formal ballot process.