ISA 600 (Revised) is now effective

Most of us have now had our first real-world experience of the revised version of ISA 600 and this is how it has so far been for us at Auren Luxembourg.

As component auditors:

We have been requested to confirm our compliance with ISQM and to demonstrate that we have the necessary policies and procedures in place to ensure that engagements are performed as per the quality standard.

Furthermore, we have seen a higher number of specific audit procedures being requested to be performed and reviewed by the group auditors.

We have also seen more of the group auditors, either through more frequent communications, by email or calls, or with longer group audit instructions and a more thorough review of our audit working papers.

As group auditors:

We have not yet experienced being the group auditor where components were not being audited by ourselves, but we have seen a surge in the number of entities looking to change their group auditors, with most of them citing their willingness to lower the audit fees as the main reason for the change. This follows the increase in the fees being requested by the larger audit firms as they look to pass on the costs associated with the increased responsibilities and the requirement for closer leading, monitoring and reviewing of the audit of components.

This is, however, a great opportunity for us to acquire group audit engagements and to later on be in the thereabouts should there be the need for components to also change auditors. The key would be for us to maintain our price competitiveness and to use efficient document preparation tools and effective communication strategies.

Ronald Lam Kee from Auren Luxembourg