top of page
  • Writer's pictureCCS

ISA 600: What’s New in Group Audits?

Updated: Jul 15, 2023

Auditing group financial statements present unique challenges, as these statements consolidate the financial information of multiple entities within a group. International Standard on Auditing 600 - Special Considerations - Audits of Group Financial Statements (ISA 600), which is set to revolutionise the way audits of group financial statements are conducted.

However, the International Auditing and Assurance Standards Board (IAASB) identified improvements to the existing standard ISA 600 based on stakeholder feedback, as outlined in their Invitation to Comment (ITC) Paper, "Enhancing Audit Quality in the Public Interest: A Focus on Professional Skepticism, Quality Control, and Group Audits," issued in December 2015.

Subsequently, a project proposal was initiated, and the Exposure Draft (ED) was released in April 2020. 83 comment letters were received on the ED-600, including one from Malaysia's Auditing and Assurance Standards Board (AASB).

The ED was finalised and approved by the Public Interest Oversight Board (PIOB) in April 2022.

Effective 15th December 2023, these changes aim to align the standards with new and updated guidelines, ensuring the quality and relevance of audits in today's dynamic business environment.

Malaysia has adopted the same effective date as the international standard, but earlier application is allowed.

So, what are these significant changes all about?

A Proactive Risk-Based Approach

The revised ISA 600 introduces a proactive risk-based approach to the audit of groups.

This means auditors will now emphasise identifying and assessing the risks of material misstatement, carefully planning the audit approach, and performing engagement procedures that address the identified risks head-on.

Two-Way Communication

Collaboration and coordination among component auditors is another crucial aspect the revised standard addresses. It emphasises the importance of effective communication and coordination (two-way communication) to ensure a seamless audit process across all entities within the group.

Professional Scepticism

Additionally, a renewed focus on professional scepticism ensures auditors maintain a critical mindset throughout the engagement.

Strengthening Audit Processes and Inclusion of Component Auditors

The revised ISA 600 clarifies how ISA 220 (Revised) requirements apply to group audits to streamline the audit process further.

These changes emphasise the necessary resources, direction, supervision, and review of the engagement team's work. Even the definition of 'engagement team' has been expanded to include component auditors.

Refine the definition of 'Component'

But that's not all.

The revised ISA also refines the definition of 'component' and offers clearer guidelines on its application.

From branches and divisions to shared service centres and non-controlled entities, auditors must adapt to these revisions and consider the risks of material misstatement associated with each component.

Principles-Based Approach: Enhancing Scalability and Flexibility in Group Audits

To ensure scalability and flexibility, the requirements of ISA 600 (Revised) are principles-based.

This means auditors can tailor their approach based on the complexity of the group audit.

The standard also features separate sections highlighting the specific involvement of component auditors.

Now, you might wonder how these changes impact your work as an Auditor

While a proactive risk-based approach undoubtedly brings benefits, auditors may face increased workload and responsibility, especially regarding direction, supervision, and review of component auditors' work.

The revised consolidation process, encompassing the aggregation of financial information from business units, could also impact audits of entities with multiple branches or divisions. The changes to the definition of a component allow for greater flexibility in theory, but it'll be interesting to see how they play out in practice.

Auditors may need to reconsider their scoping strategies and use component auditors to ensure compliance with the revised standard.

As the effective date approaches, both group and component auditors must familiarise themselves with the new requirements and adapt their audit methodologies accordingly.

175.1 ISA 600 Revised Standard and Conforming Amendments
Download PDF • 817KB


The articles, templates, and other materials on our website are provided only for your reference.

While we strive to ensure that the information presented is current and accurate, we cannot guarantee the completeness, reliability, suitability, or availability of the website or its content, including any related graphics. Consequently, any reliance on this information is entirely at your own risk.

If you intend to use the content of our videos and publications as a reference, we recommend that you take the following steps:

  1. Verify that the information provided is current, accurate, and complete.

  2. Seek additional professional opinions, as the scope and extent of each issue, may be unique.





  1. 核实所提供的信息是最新的、准确的和完整的。

  2. 寻求额外的专业意见,因为每个问题的范围和程度,可能是独特的。

Keep in touch with us so that you can receive timely updates


1. Website ✍️ 2. Telegram ✍️ 3. Facebook ✍

390 views0 comments
bottom of page